In an economic association, the association is taxed on the profit. The members who are employed and receive a salary from the association are taxed in the same way as other employees.
1. The association must apply for approval for F tax
An economic association must apply for approval for F-tax and register for VAT and as an employer with the Swedish Tax Agency. The information entered in the application is the basis for how much preliminary tax the association must pay each month. In the e-service, you can also register the association for VAT and as an employer.
Apply via form
If you are unable to use the e-service, you can instead apply via paper form to be approved for F-tax. The same form can also be used to register the association for VAT and as an employer. You send the form to the Swedish Tax Agency.
2. Calculate your tax
The Swedish Tax Agency's tax calculator helps you estimate how much income tax and social security contributions you will have to pay as a sole trader. Please note that the calculator is not exhaustive but gives an approximate result.
3. Submit your preliminary income tax return
Before each calendar year, you submit a preliminary income declaration to the Swedish Tax Agency with an estimate of the profit, i.e. the difference between income and expenses. The Swedish Tax Agency calculates your preliminary tax before the start based on your application for F tax.
4. Pay the tax on an ongoing basis every month
The association must pay the preliminary tax to the association's tax account every month. Employer contributions must be reported in the employer declaration that the Tax Agency sends out every month.
The VAT is normally reported every or every three months in a VAT return. Only if the association has a turnover of no more than 1 million kroner during a year can it report VAT in a VAT return once a year.
Report change in income
If, during the year, you discover that the association's net profit will be higher or lower than initially declared, you should notify the Swedish Tax Agency of the change. Otherwise, there is a risk of the association having to pay tax arrears, or paying too much tax during the year, which the association will then get back when the preliminary tax is reconciled with the final tax. A change is made by submitting a preliminary income tax return.
5. Submit the tax return
An economic association declares its result in a tax return. The preliminary tax is then reconciled with the final tax by The Swedish Tax Agency.
6. The final tax
If the association has payed too much preliminary tax, it gets the excess amount back. If the final tax turns out higher than the preliminary, the association must instead pay tax arrears.
In economic associations, distribution of the earnings of the business is known as surplus distribution. Surplus distribution can be made by way of compensation or contribution dividends. Compensation is the most common form and involves compensating members based on their participation in the business. If the association is considered a closely-held company, dividends can be paid according to special tax rules for closely-held companies.
The employer's contribution actually consists of several different contributions that provide basic social security cover. For the income year 2024, the employer's contribution is 31.42 percent for most employees.