Sweden has no minimum wage levels incorporated in law. Minimum wages are often regulated in the collective agreements between the trade unions and the employers’ associations.
Employment contracts are governed by law and in many cases also by collective agreement between the employer’s association and the trade unions. As a minimum, employment contracts normally cover applicable salary and benefits, working location,working hours, holiday entitlement, termination of employment and supplementary pension benefits.
Employment contracts are valid until further notice unless otherwise agreed, but can include a probationary period (trial period) of a maximum of six months. Other types of contracts include fixed term contracts, substitute contracts and seasonal work contracts.
Swedish employers and foreign employers with a permanent establishment in Sweden are required to report and pay withholding taxes in Sweden on a monthly basis.
Irrespective of the activities performed and the legal status in Sweden, an employer has to report and pay Swedish social security contributions for any employee belonging to the Swedish social security system. The reporting and payments are made on a monthly basis.
An employer is also obliged to file annual income statements with the Swedish Tax Agency for each employee. The annual income statement should summarize the salary paid (and preliminary taxes withheld, if applicable) during the income year.
Corporate tax compliance includes, for instance, preliminary tax returns, tax computations at year end and yearly income tax returns to be filed with the Swedish Tax Agency.
There are four different filing dates in respect of the yearly income tax returns, depending on the tax year in question (financial year). If the tax year corresponds to the calendar year, the income tax return is due on 1 July in the following year.
VAT compliance can include preparing and filing of VAT returns, EC sales lists and Intrastat declarations.
VAT paid on purchases can be offset against VAT collected on sales and the net is payable through VAT returns. The VAT return must, as a main rule, be filed every month. However, if the tax base for VAT does not exceed 40 million SEK per year, the VAT return is usually to be filed every quarter.
According to Swedish tax law, transfer pricing documentation is to be maintained for all intra-group transactions. According to the documentation requirements in force since 1 January 2007, transfer pricing documentation is to contain the following information: