Written by: TaxDAO
1 Introduction
The Kingdom of Sweden (Swedish: Konungariket Sverige), commonly known as Sweden (Sverige), is a Nordic country located in the Scandinavian Peninsula. It is one of the largest economies in Northern Europe. In 2023, the GDP reached 593.12 billion US dollars, and the per capita GDP reached 56,291 US dollars, showing its high living standards and economic potential. In recent years, although Sweden has faced the challenges of high taxes and high government deficits, it still maintains a strong social welfare system and provides citizens with comprehensive protection from cradle to grave. In addition, Sweden's entrepreneurial environment is very friendly. The government's emphasis on education and technological innovation has promoted the vigorous development of scientific research innovation and "unicorn companies". Cryptocurrency has also developed rapidly in Sweden due to a relatively relaxed environment, and the trading volume has gradually increased. Sweden's cryptocurrency policy not only affects the stability and development of its domestic financial market, but also has important significance for international investors and enterprises. This article will analyze Sweden's cryptocurrency policy from three aspects: Sweden's basic tax system, cryptocurrency tax system, and Sweden's crypto asset tax system summary and outlook, and look forward to its future development trends.
2. Overview of Sweden’s basic tax system
2.1 Swedish tax system
Sweden implements a two-level taxation system, namely, the central and local taxation system. The taxation authorities are composed of the State Administration of Taxation and the regional taxation authorities. The State Administration of Taxation is responsible for issuing taxation laws, administrative interpretation of taxation laws, taxation recommendations, and managing the taxation policies of the regional taxation authorities. The regional taxation authorities are responsible for the specific collection of central and local taxes. Among the 10 regional taxation agencies under the State Administration of Taxation, three regional taxation agencies in Stockholm, Malmö, and Gothenburg have large enterprise taxation collection management offices. Taxation departments at all levels implement tax laws and are responsible for the laws. They are completely independent, and neither the government nor the parliament can interfere with the work of the taxation authorities. All tax laws in Sweden are passed and issued by the parliament, and the parliament has a taxation committee that is specifically responsible for taxation matters. The Swedish taxation system is mainly based on income tax, while value-added tax (MOMS) is also an important source of tax revenue. The main taxes include personal income tax, corporate income tax, value-added tax, consumption tax, social security tax, land and property tax, inheritance and gift tax, etc.
2.2 Income Tax
Swedish income tax is divided into corporate income tax and personal income tax.
The taxpayers of Swedish corporate income tax are Swedish resident companies, which are subject to a fixed tax rate of 21.4%. In Sweden, companies are classified as resident companies and non-resident companies. Sweden adopts the registration place standard, that is, whether the company is registered with the government at all levels in the country is used as the basis to determine whether the company is a resident company in the country. According to this standard, any company registered in the country in accordance with the laws of the country, regardless of whether its head office, management and control center are located in the country, and regardless of whether its investors are nationals or foreigners, can be identified as a resident of the country. If it is not registered, the company can still be regarded as a resident, provided that its actual management body is located in Sweden, or the company needs to pay taxes in Sweden due to its place of residence, place of management or other similar reasons, then it will be regarded as a resident for the purpose of the tax treaty. In areas that enjoy special support from the Swedish government, 10% of the social security tax paid by enterprises for employees can be deducted before corporate income tax. In addition, companies can withdraw "tax distribution reserves" for not more than 25% of pre-tax profits each year. The reserve can be used to offset losses in subsequent years and is not taxable in the year of withdrawal. If the losses are not offset within six years of withdrawal, the portion must be included in taxable income and tax paid.
The taxpayers of personal income tax in Sweden are resident taxpayers. Resident taxpayers refer to natural persons who have residence or habitual residence in Sweden and pay personal income tax in Sweden on their global income. Taxable income is divided into employment income, business income and investment income. Natural persons who have neither residence nor habitual residence in Sweden are non-resident taxpayers and only pay personal income tax in Sweden on their income derived from Sweden. For employment income and business income, taxpayers can calculate and pay municipal income tax and national income tax after deducting personal deductions. If the taxpayer receives income related to the previous two years or the next two years (including the current year) (employment income and business income in certain circumstances) in the current tax year, and the income is at least 50,000 Swedish kronor, the income needs to be adjusted across periods. The specific progressive tax rates are as follows:
Investment income refers to the income after deducting the cost of acquiring the asset from the disposal income. This tax is called capital gains tax. The calculation method varies according to the different forms of capital gains. Except for gifts and death, asset sales, replacements and transfers should be taxed as investment income. The fixed tax rate for investment income is 30%, and local governments do not tax investment income.
2.3 Value Added Tax
Swedish VAT is called MOMS. Taxpayers are entities and individuals who carry out any economic activity in Sweden. This definition excludes individuals employed under employment contracts or other legal forms. Legal entities that have completed VAT registration are also considered VAT taxpayers when they purchase certain services from outside Sweden. Economic activity refers to activities carried out by producers, traders or service providers, including mining, agriculture or other similar occupations. Since January 1, 2017, small businesses with sales of no more than SEK 30,000 in the current tax year and the two previous fiscal years are exempt from VAT, but small businesses can also choose to register as VAT taxpayers. Non-profit organizations of a general nature and registered religious groups are considered non-tax residents and are therefore exempt from VAT. This special provision also applies to partnerships and trading companies. VAT-taxable activities include: (1) all sales of goods and services, except for taxable goods or services that are explicitly exempted from tax under Swedish law; (2) imports and purchases within the EU. The standard VAT rate in Sweden is 25%, in line with the EU VAT Directive, although certain goods and services may be subject to lower preferential rates, such as 12% (restaurants and restaurant services; food; sales of own works of art by artists or artists' estates; imported works of art, collectibles and antiques, etc.) and 6% (books, newspapers, magazines, etc.; passenger transport operations; admission to circuses, cinemas or theatre performances or shows; admission to zoos, etc.).
3. Sweden’s cryptocurrency tax system
In Sweden, investors can buy Bitcoin and other cryptocurrencies directly through websites such as Safello, BTCX and Trijo, or through online banks such as Avanza and Nordnet. Goobit, the company behind the BTCX platform, has about 200,000 Swedish customers. For emerging technology industries such as cryptocurrencies, Sweden's tax system has shown an advanced and friendly attitude, providing a transparent and predictable tax environment that helps companies achieve long-term growth, maintain their business reputation, and build trust among investors.
As the leading authority in national taxation, the Swedish Tax Agency (Skatteverket) is not only responsible for the collection and administration of taxes, but also for protecting society from tax abuses by enforcing tax regulations. In the field of cryptocurrency, the Swedish Tax Agency has clarified its tax position, classifying income from cryptocurrency as capital gains, a sub-item under income tax, subject to a 30% tax rate. This clear tax guidance provides a clear path for cryptocurrency companies and individual investors to comply with tax laws. For example, when a Swedish resident sells his or her cryptocurrency holdings and realizes a profit, the profit will be taxed as capital gains, whether it is sold through the trading market, cryptocurrency obtained through mining activities, or payment for goods or services received in the form of cryptocurrency, all of which must be recorded in detail in the annual tax declaration. The tax declaration requires taxpayers to provide detailed information on each transaction, including the purchase and sale dates, the profit or loss realized, and must be converted into Swedish kronor (SEK) at the exchange rate on the transaction date.
To ensure the accuracy of tax returns, taxpayers need to pay close attention to changes in exchange rates, as even small transactions can have significant tax implications due to exchange rate fluctuations. In addition, if a taxpayer suffers losses from cryptocurrency transactions, these losses can be used to offset other capital gains, thereby reducing the taxable basis. However, this process is subject to specific rules and restrictions, and taxpayers should consult a professional tax advisor. to ensure compliance.
In special cases, such as income from cryptocurrency mining or participation in staking and decentralized finance (DeFi) activities, it may also be considered personal business income and subject to different tax rates based on the individual's total income. In addition, while most cryptocurrency transactions are taxable, in certain specific cases, specific cryptocurrency activities may qualify for tax exemptions or exclusions.
In recent years, the Swedish Tax Agency (Skatteverket) has improved tax standards and ensured the fairness and transparency of tax policies through close cooperation with EU tax agencies and international organizations. As an OECD member, Sweden actively follows the OECD's tax rules and has introduced new measures in the field of cryptocurrency taxation, such as adopting the Crypto Asset Reporting Framework (CARF), which requires crypto companies to automatically report tax-related information and share data internationally. In 2022, the new DAC amendment proposed by the European Commission is consistent with the CARF goals, introducing new rules for all crypto asset service providers in the EU, consistent with the MiCA regulations and the Anti-Money Laundering Directive, and improving the detection of tax evasion and fraud. In addition, in April this year, the Swedish Tax Agency investigated 21 cryptocurrency mining companies and found that 18 of them provided misleading information to evade taxes, requiring them to pay more than 990 million Swedish kronor in taxes. It can be seen that Sweden is strictly enforcing cryptocurrency-related tax regulations.
4. Summary and Outlook of Sweden’s Crypto Asset Tax System
Sweden is at the forefront of global financial innovation and is actively shaping a market environment that is both open and regulated for cryptocurrencies. It is expected to continue to strengthen supervision in this area. Sweden may strengthen cooperation with other EU countries and international organizations to improve global compliance with cryptocurrency taxes by sharing information and best practices. In the future, the Swedish government may explore innovative incentives, including tax breaks for companies that actively report cryptocurrency transactions, or financial subsidies for companies that invest in cryptocurrency-related technology research and development, to promote tax compliance and promote the development and application of cryptocurrency technology. Sweden may consider providing tax credits for companies that use blockchain technology to improve transparency and efficiency, or providing R&D funding for startups that develop cryptocurrency security storage solutions. These policies will help foster an innovation-friendly business environment while ensuring that tax regulations are valued and enforced.
