New tax rules for the corporate sector
A general limitation on interest deductions for companies has been introduced in combination with a reduction in corporation tax. The tax is reduced in two stages, to 21.4 per cent in 2019 and 20.6 per cent in 2021. The expansion fund tax is reduced to 20.6 per cent from 2021.
A deduction ban for interest in certain cross-border situations has been introduced, so-called hybrid rules. Furthermore, the targeted interest deduction limitation rules for certain internal loans have had their scope narrowed. In addition, an interest definition and rules regarding the interest component of lease payments for financial lease agreements are being introduced.
Another new measure is a primary deduction for all business owners. This means that an additional 12 per cent of the expenses for constructing a rental property can be deducted within a six-year period from when the rental property is completed.
Certain changes are also being made to the rules for the appropriation reserve and the safety reserve.
Individual information on the employer's payroll declaration
Information on remunerations paid for work and tax deductions shall be reported on an individual level to the Swedish Tax Agency (Skatteverket) monthly in an employer declaration instead of annually in an information slip. The purpose of the legislative amendments is to reduce tax fraud and tax evasion. For those obligated to maintain a personnel register and who had more than 15 employees on 1 July 2018, the provisions have applied from 1 July 2018. Other obligated parties shall apply the provisions from 1 January 2019.
Lowered tax for people over 65
The tax is being further reduced for older people. The tax reduction is achieved by strengthening the increased basic deduction for those who have reached the age of 65 at the beginning of the income year.
The change means that the basic deduction amount is increased for those with an income between 60,500 and 1,177,000 kronor per year. For those with a monthly income of 25,000 kronor, the tax reduction will be approximately 350 kronor per month. Those with incomes over 1,182,000 kronor per year will have their income tax increased. The reason is that this group, under previous rules, paid lower taxes than wage earners under 65.
Raised layer boundaries
The tax is reduced for individuals who pay state income tax by raising the lower tax bracket threshold to SEK 490,700. The upper tax bracket threshold for 2019 is SEK 689,300.
The new cut-off points for people under 65 are therefore 504,400 and 703,000 kronor respectively. For people over 65, the cut-off points are 547,500 and 733,300 kronor respectively.
Increased tax deduction for earned income
The earned income tax credit is being extended by a total of SEK 10 billion for individuals who, at the beginning of the tax year, are not yet 65 years old and have earned income exceeding 0.91 price base amount, which is SEK 42,315.
Changed tax rules upon deregulation of the gambling market
The income taxation of gambling operators and players will be designed based on the licensing system introduced by the new Gambling Act. Svenska Spel and its subsidiaries that solely conduct gambling activities, as well as ATG, are no longer exempt from income tax. Player winnings from licensable games provided by entities other than licence holders shall be taxed under the capital income category, regardless of the gambling company's domicile.
A specific provision has also been introduced regarding the taxable base for taxable player winnings. Income from games operated under a licence for public benefit purposes by registered religious communities and non-profit associations shall be tax-exempt.
Changed VAT rules for electronic services
Provisions have been introduced to implement the amendments to the VAT Directive that constitute the first step of the so-called e-commerce VAT package for cross-border sales within the EU.
The aim is to simplify matters for companies selling electronic services to consumers in other EU countries. These services should be taxed where the consumer is located, but to simplify things for companies, an option is being introduced to instead apply Swedish VAT rules if the company's turnover of electronic services to consumers in other EU countries is below SEK 99,680 per year (a taxation country threshold).
New VAT rules for vouchers
An EU adaptation has been made to the rules for vouchers. The aim is for the same rules to apply in all EU countries. The new rules mean that definitions of vouchers, single-function vouchers and multi-function vouchers are being introduced. It also defines what constitutes turnover when processing single-function vouchers and multi-function vouchers, respectively. Furthermore, there is a provision regarding the taxable base for transactions with multi-function vouchers.
New type of taxable person in the chemical tax
The concept of ”Registered Receiver” has been introduced as a new type of taxable person in the Chemicals Tax Act in certain electronics. As a Registered Receiver, the Swedish Tax Agency may approve any person who intends to professionally import or receive taxable goods from another EU country into Sweden and who, considering their financial circumstances and other factors, is suitable as such a receiver. This measure is requested by the industry and simplifies the administration of the tax.
To avoid double taxation in certain situations, an adjustment is also made to the tax exemption for goods for which tax liability has previously arisen.
The waiting period deduction replaces the waiting day.
A waiting period deduction has been introduced into sickness insurance, replacing the waiting day. The waiting period deduction is to be made from the first day of sick pay or sickness benefit for those not covered by high-risk protection provisions.
For sick pay, a deduction shall be made amounting to twenty per cent of an average weekly sick pay allowance. For sickness benefit, the waiting day deduction shall constitute one full calendar day of calculated sickness benefit or, in cases where sickness benefit is calculated based on working hours, 20 per cent of an average weekly sickness benefit allowance.
Self-employed individuals who only have income from other gainful employment are not affected by the regulatory changes in their capacity as self-employed.
Modern rules on trademarks
The Swedish Trademarks Act and Trademarks Ordinance have been adapted to new EU rules. This simplifies things for companies operating within the EU and creates conditions for increased exports. The Swedish regulations have also become more technology-neutral, which facilitates the registration of new types of trademarks, such as animated trademarks.
Brands must be protected to retain their value. The changes therefore also mean that trademark protection is strengthened so that it becomes possible for customs to stop goods passing through the country even if they are not intended for sale on the Swedish market, so-called transit. This increases the possibilities of combating illegal trade in counterfeit goods.
New law on company names
A new law on company names has replaced the current act on trading names, which was more than 40 years old. In terms of substance, the new law largely corresponds to the old one, but is more transparent and easier to apply. In the new law, the word Company in the sense of company name, gone, it is now called Company name. The concept Duotight changed to Particular company name and parallel firm heter nu Company name in a foreign language.
The expressions Company signature, Accountant and the agreement is signed by are not affected by this amendment.
Digital data acquisition from companies
A new ordinance came into force on 1 October 2018, stipulating that around 70 designated authorities should, as far as possible, use data on companies that is already available within the public administration. This is to prevent companies from having to submit the same information multiple times.
The authorities shall also, when appropriate, coordinate their data collection from companies so that companies' reporting of data is limited. When authorities develop systems for data collection from companies, the systems shall be designed so that companies' reporting of data primarily occurs digitally. The change aims to simplify things for companies.
Source: Wolters Kluwer – Tax Information
