Principal Taxes
Sweden enacted a major tax reform with effect from January 1,1991, and since then there has been several conforming adjustments of the tax system . The tax reform broadened the tax bases for both corporate and individual income tax purposes at the same time as the nominal income tax rates were reduced. The current corporate tax rate in Sweden is one of the lowest in Western Europe. The 1991 tax reform also broadened the tax base for the value-added tax.
Direct Taxes
The following direct taxes are levied in Sweden:
- Corporate national income tax at a nominal rate of 28% for 1995, levied on companies based on the results reported in their annual statutory accounts with certain adjustments for tax purposes;
- Individual local income tax at a nominal rate of approximately 31% for 1995, which consists of a local tax which differs depending on the locality;
- Individual national income tax at a rate of 25% for 1995, which primarily affects taxpayers with incomes over a threshold amount, which is SEK 203,900 for 1995.
- Individual capital gains tax at a rate of 30% for 1995.
- Net wealth tax at a rate of 1,5% for 1995, which primarily affects taxpayers with a net wealth in excess of SEK 800.000.
Indirect Taxes
Sweden assesses the following indirect taxes:
- Value-added tax (VAT), generally levied at the rate of 25% on taxable sales of both goods and services. The rate is 21% on food and 12% on hotel services and passenger transportation. From 1 January 1996 the rate for food is lowered from 21% to 12%.
- Customs duties, which vary depending on the type of goods and the country from which they are imported.
The contents of this article are intended as a general guide to the subject matter. Specialist advice should be sought for your specific circumstances.
For further information contact Per Snellman on Tel: +468 613 9000 0r Fax: +468 791 7511; or enter a text search 'Ernst & Young' and 'Business Monitor'.
