The European Commission has decided to refer Sweden to the Court of Justice of the European Union (CJEU) for failing to align its rules on preliminary income taxation with EU law.
Since 2021, Swedish clients have been required to withhold 30% preliminary tax on payments made to contractors established outside of Sweden if the contractor is not approved for Swedish F-tax. This obligation applies even when the contractor does not have a permanent establishment in Sweden and is therefore not liable to tax in the country. The action is however only related to contractors established in other EU or EEA countries.
The Commission considers this obligation to be in breach of the EU rules on the freedom to provide services. Despite repeated calls for action—through formal notices and reasoned opinions issued in July 2023 and May 2024—Swedish authorities have not taken sufficient steps to address the issue, prompting the Commission to initiate legal proceedings.
At Skeppsbron Skatt, we have extensive experience assisting both companies and individuals with cross-border tax matters. Please don’t hesitate to contact us if you would like to learn more about how the Commission’s decision may affect your situation.
