Sweden Crypto Tax

Sweden ranks 12th in the 2022 International Tax Competitiveness Index which is an indication that the national taxation system is quite fairly structured and therefore is easy to comply with, as well as promotes the country’s economic performance. Swedish crypto businesses have all the opportunities to take advantage of the system in a way that fosters sustainable growth, safeguards reputation, and induces trust among crypto investors.

The Swedish Tax Agency is in charge of the collection and administration of taxes in Sweden, as well as the imposition of relevant tax regulations and the protection of society from the misuse of the taxation system. The registration with the authority for tax purposes largely depends on the legal structure and type of economic activities of the business. It’s important to note that some non-Swedish companies may also be required to register and become taxpayers in Sweden.

The agency closely cooperates with other EU tax authorities and international organisations in order to ensure high taxation standards and transparency. Since Sweden is a member of the Organization for Economic Cooperation and Development (OECD), it’s obligated to follow tax rules introduced by the organisation. The latest crypto-related change is the Crypto-Asset Reporting Framework (CARF), a new international tax transparency framework, the purpose of which is to raise crypto taxation and tax reporting standards across its member countries and beyond. It obligates crypto businesses to automatically report tax-related information which is shared internationally.

In 2022, to ensure tax transparency, the European Commission proposed a new amendment to the Directive for Administration Cooperation (DAC) which is consistent with CARF and introduces new rules for all cryptoasset service providers in the EU. It’s also harmonised with the landmark Markets in Crypto-Assets (MiCA) Regulation and anti-money laundering directives. The rules will improve the detection of tax evasion and fraud as they obligate crypto businesses to report transactions of clients residing in the EU.

Advantages of the Swedish Tax System

Sweden has a territorial tax system that excludes various types of income that international companies earn (e.g., dividends and capital gains) in foreign countries from their domestic tax base in Sweden. Moreover, Sweden provides for tax losses to be carried forward indefinitely, enabling companies to offset them against the taxable profit and be taxed on their average profitability.

To avoid double taxation and tax evasion of businesses having an international presence, Sweden has signed over 90 international agreements on the elimination of double taxation. They enable crypto and other businesses to claim foreign tax credits, provided that they meet certain conditions. If you’re not sure when and to which taxes and types of income a particular agreement applies to your business case, reach out to our team here at Regulated United Europe（RUE）and we’ll schedule a personalised consultation for you.

To encourage growth and productivity in the economy, Sweden strives to attract and support innovative and groundbreaking businesses. Its openness to innovation is demonstrated through the national support for research and development (R&D) activities. For instance, the government grants subsidies that specifically support companies with labour-intensive R&D and loss-making companies through the reduction of the payroll tax liability for the R&D staff (a 19,59% exemption of the employer’s Social Security Contributions). Overall, Sweden’s investment in innovation is among the highest in the world as it heavily focuses on broad and specialised research that can solve the most pressing societal issues.

In Sweden, there are no inheritance and gift taxes which means that cryptoassets can be passed on to other individuals without triggering a taxable event. To determine whether a crypto transfer is a gift, a voluntary crypto transfer must occur and there must not be any service in return.

Corporate Income Tax

The standard Corporate Income Tax rate is 20,6% which is lower than average in the EU and can get even more reduced as companies have the option to make deductible annual appropriations to a tax allocation reserve of up to 25% of their profit. Tax resident companies are generally liable to tax on their income sourced in Sweden and abroad. Non-tax residents are obligated to pay the tax on their income sourced in Sweden. A company is considered a tax resident if it’s established in Sweden in accordance with the Swedish Companies Act. Crypto companies are taxed on most of their crypto-related income but can be exempt in certain cases.

For Corporate Income Tax purposes, there are various deductible expenses. General startup expenses for generating and maintaining business income are deductible. Interest paid to affiliated companies is also deductible, provided that the true creditor is an EEA resident, is located in a jurisdiction covered by a double taxation agreement, or is taxed on the interest income at a rate of at least 10%. However, such expenses as charitable contributions, fines, penalties, and most Swedish taxes aren’t deductible.

Withholding Tax

In Sweden, there is no Withholding Tax on dividends paid to individual and corporate residents. Non-resident companies and individuals are generally subject to a 30% Withholding Tax rate. Of course, when an international double taxation agreement or the EU Parent-Subsidiary Directive specifies a lower rate, the applicable tax may be reduced. The Withholding Tax isn’t imposed on interest, royalties, or fees for technical services irrespective of residence status.

Capital Gains Tax

Pursuant to the Swedish Income Tax Act, cryptocurrencies fall under the category of other assets. The tax authority doesn’t consider cryptoassets legal tender and any sale or disposal of cryptoassets done by individuals is subject to the Capital Gains Tax at a 30% rate. It’s possible to offset 70% of any capital losses incurred during a tax year against capital gains and claim a tax deduction.

The following crypto activities are taxable:

• Selling and exchanging cryptocurrencies for fiat money
• Trading one type of cryptocurrency for another
• Lending cryptocurrencies
• Selling products or services for cryptocurrencies

Capital gains received from a business-related sale of shares in a resident company are exempt from tax. The sale of shares held in a non-resident company can also be exempt from tax, provided that the structure of the foreign company is similar to a Swedish Limited Liability Company or a Swedish Economic Association and the shareholding is business-related. Taxable capital gains are treated as other business income and are taxed at the standard Corporate Tax Rate.

Value-Added Tax

In Sweden, the standard VAT rate is 25% and it’s aligned with the EU VAT Directive. Crypto companies are generally required to register as VAT payers but many of them can avail of exemptions specific to crypto businesses. For instance, thanks to the case of a Swedish citizen, cryptocurrencies are VAT-exempt across the EU. In 2015, the Court of Justice of the European Union (CJEU) ruled out that the exchange of cryptocurrencies into fiat money is considered a financial service and therefore must be VAT-exempt along with legal tender (banknotes and coins).

The sale of other crypto-related products and services might be subject to VAT under general rules. It includes promotional activities, hardware and software development, and maintenance. Crypto mining, however, doesn’t constitute a taxable event as there is no sufficient client-seller relationship.

Small businesses can benefit from VAT thresholds which can relieve their tax burden as they aren’t obligated to register as VAT payers. The threshold for VAT registration for small Swedish businesses is an annual turnover of 80,000 SEK (approx. 7,000 EUR). Non-Swedish companies with no permanent establishment in Sweden must register as VAT payers as soon as they start selling their products and services to Swedish customers.

Payroll Taxes in Sweden

Every crypto company which employs people is legally required to register as an employer with the Swedish Tax Agency and remit contributions to the Swedish Social Insurance Agency and the Swedish Pensions Agency. The Social Security rate is 38.42%, where employers pay 31.42%, and employees are required to pay the remaining 7%. Employers must fill in employer contributions and PAYE tax returns on a monthly basis and report payments and tax deductions through the PAYE Tax Return service. In the PAYE tax return, an employer must provide information about both employees and the employing company.

The employer’s 31.42% rate includes the following:

• Health Insurance – 3.55%
• Retirement Pension – 10.21%
• Parental Insurance – 2.60%
• Occupational Injury – 0.20%
• Survivors Pension – 0.60%
• Labor Market Fee – 2.65%
• General Payroll Tax – 11.62%

The total Personal Income Tax rate is 52% and is withheld by employers on their employees’ behalf. It consists of the National Income Tax and Municipal Income Tax. While the latter is always 32%, the National Income Tax isn’t applicable if income doesn’t exceed 598,500 SEK (approx. 52,000 EUR). Once this threshold is exceeded, a 20% rate applies. These rates don’t apply to non-residents working in Sweden who are subject to a flat rate of 25%.

How do I pay taxes on crypto in Sweden in 2024?

In Sweden, taxation of cryptocurrency income is regulated by the Swedish Tax Agency (Skatteverket). As of 2024, it is important to take into account innovations and updates in the tax legislation regarding cryptocurrencies. Below is an overview of the main aspects of the taxation of cryptocurrency income in Sweden for 2024, formulated on the basis of anticipated updates and current rules.

Definition of Cryptocurrency Income

In Sweden, income from cryptocurrency is categorised as capital gains and is subject to taxation. Such income includes, but is not limited to:

• Profit from the sale of cryptocurrency
• Income from mining
• Receiving cryptocurrency as payment for goods or services

Rates of Taxes

The tax rate on capital gains in Sweden is generally 30 per cent. However, it is worth paying attention to possible changes in rates according to recent tax reforms.

Declaration of Income

1. Reporting: All cryptocurrency transactions must be declared in a tax return. This includes details on each transaction: date of purchase, sale, profit or loss.
2. Conversion to SEK: For tax reporting purposes, cryptocurrency income and expenses must be converted into Swedish kronor (SEK) at the exchange rate on the transaction date.
3. Accounting for Losses: Losses from cryptocurrency trading can be used to reduce the taxable base of capital gains, but the rules and limitations should be checked separately.

Special Cases

• Mining: Income from cryptocurrency mining is generally considered personal business income and is taxed at different rates depending on your total income.
• Staking and DeFi: Income from staking or decentralised finance (DeFi) is also taxable and must be reported on the tax return.

Tax Benefits and Exemptions

Some cryptocurrency activities may fall under tax exemptions or exclusions, depending on the circumstances. However, as a general rule, most cryptocurrency transactions in Sweden are subject to taxation.

Conclusion

Cryptocurrency tax legislation in Sweden continues to evolve. To ensure tax compliance, it is crucial to follow the latest updates from the Swedish Tax Agency and, if necessary, consult professional tax advisors. Responsible management of cryptocurrency assets and accurate income declaration will help avoid tax problems and optimise tax liabilities.

 

Table with the main tax rates in Sweden:

These rates reflect the general taxation structure in Sweden and may be subject to change depending on government tax policy and the economic situation in the country.

 

If you’re determined to develop a crypto business in one of the most innovative countries in the world, our team of dedicated and quality-focused legal consultants here at Regulated United Europe (RUE) will be delighted to provide you with tailored, value-added support in optimising your taxes in accordance with applicable legislation. Moreover, we also offer comprehensive Swedish crypto company formation, crypto licensing, and financial accounting services. Contact us now to schedule a personalised consultation and set the stage for long-lasting success.

Also, lawyers from Regulated United Europe provide legal support for crypto projects and help with adaptation to MICA regulations.