A new employer concept in Sweden

The government has made a proposal to introduce a so-called economic employer concept. The proposal means that more foreign workers working temporarily in Sweden can be taxed here. The proposal is proposed to enter into force on 1 January 2021.

Current rules

Under Swedish internal law, a limited taxable person is taxed only on certain income related to Sweden. For example, a limited taxable worker employed by a company in Sweden is taxed during temporary work in the country. If the employee is hired from a foreign company that has no permanent establishment in Sweden and the stay here does not exceed 183 days during a 12-month period (183-day rule), the employee is not taxed in Sweden under the current rules. This is thus an exception rule. A corresponding rule exists in tax treaties that Sweden has concluded with other countries.

In Sweden, a formal concept of employers is currently applied. This approach applies both to the application of internal law and to the application of tax treaties. In many cases, countries applying an economic employer concept have the power of taxation under tax treaties on remuneration covered by the new proposal. Due to the fact that tax treaties can never extend Swedish tax law, the Swedish approach means that the right to taxation that Sweden receives through a tax treaty cannot always be used.

Under current rules, the obligation to make tax deductions applies only to Swedish companies and foreign companies with a permanent establishment in Sweden.

New rules

Among other things, the proposal does not allow the 183-day rule to be applied in the case of labour hire. ’Hire’ means an employee who is made available to carry out work in Sweden for a Swedish company or foreign company with a permanent establishment in Sweden and which is carried out under the control and management of that company.

An exception shall apply if the work in Sweden is carried out for a maximum of 15 consecutive days. Furthermore, the total working days in Sweden must not exceed 45 days during a calendar year.

Furthermore, the proposal requires foreign payers to make tax deductions from the remuneration paid for work in Sweden.

Prop. 2019/20:190.


The introduction of an economic employer concept means that foreign workers who work temporarily in Sweden and who have previously been able to apply the 183-day rule will no longer be able to apply the rule. Furthermore, an obligation arises for the foreign employer to register as an employer in Sweden.