A new year always brings with it new legal changes in Sweden and previous changes may become more noticeable over time. As we have previously reported in our online newssheets, the rules from 2022 allowing consultants to claim direct employment with an end client they have worked with for 24 months did, for example, start to have practical effects in October 2024, and the number of such claims is likely to increase in 2025. 

The general trend in Sweden of decreasing income taxes will continue in 2025 through increases in default deductions for working individuals and increased thresholds for the central governmental tax. Swedish fuel taxes have also been decreased for 2025. Some Swedish municipalities have, however, at the same time increased their local income taxes, and such changes takes place every year, and does not require changes to the legislation.
 
As happens most years, the indexed base amounts that underpin many governmental calculations have also been increased to reflect inflation, which will impact many categories of calculations and, among other things, increase the amount of certain benefits.
 
While we cannot cover all the changes made each year, nor provide in-depth information for each of our client's specific industries, we have summarized some of the more notable legislative changes that will come into effect in 2025. Not all legal changes are made at the start of the year, and sometimes important changes may be introduced during later months.
 
Social Fees
The Swedish default social fee rate of 31.42%, as well as the components which make up that percentage, remains unchanged into 2025. Some minor changes have taken place in the treaty-specific social fees for certain categories of posted workers. These changes affect few employees, and it falls outside the scope of this general newssheet to comment the specifics of each social fee treaty.
 
The preexisting program of giving a social fee discount for a company's first employee has, from January 1st, 2025, been expanded to the first two employees, and the maximum salary affected is increased.  This social fee discount now lowers the social fees to 10.21% on the portion of salaries below SEK 35 001 per month during the first 24 months of employment, though a complex series of conditions exists for this program. Among other things, the discount for the first employee only applies if they were hired after January 1st, 2024. The discount rate only applies if the second employee was hired after May 1st, 2024, and the first employee remains on the payroll.
 
Employers Become Obligated to Report Parental Leaves
To decrease fraud involving wrongfully claimed parental benefits, the monthly employer tax declarations shall, from January 1st, 2025, be reported for all employees who have taken any sort of parental leave. Employers do not normally provide any salary to employees on parental leave unless they have entered an individual or collective agreement to do so, but under the new rules, each employer will still be required to clearly and specifically state in the employer declaration during which time an employee has been on parental leave. The correct reporting of parental leaves by the employer will be of tremendous importance for the individual employee since it will impact their ability to receive parental benefits from the Swedish state. The change to the reporting process itself is minor and will be carried out as part of the regular payroll reporting.
 
Ban on Putting Textile Wastes in the Household Garbage
Sweden has previously introduced mandatory separation between distinct categories of garbage, and from 2025 and onwards, it is illegal to put textiles of any sort in the regular garbage intended for incineration. Whole but unwanted clothes and textiles are to be donated to second-hand outlets while unusable textiles should be deposited in specially designated receptacles, which are to be made available in public and mercantile locations by municipalities and textile retailers.
 
As with previous Swedish ordnances for the handling of garbage, it is unlikely that an individual would be fined by the authorities for not correctly sorting their household waste unless their actions cause problems. However, garbage collection companies are expected to uphold the rules and are given the authority to issue sorting fees and other penalties from parties found to have violated the recycling rules. Landlords affected by such penalties due to the actions of their tenants may, in turn, pass on the cost of sorting fees paid to the offender or, in extreme cases, terminate rental agreements or cooperative housing in cases of severe and repeated mishandling of household waste.
 
Lowered Tax on Investment Savings Accounts
Sweden has for many years offered private individuals the option to open investment savings accounts (Swe. "Investeringssparkonton") with accredited Swedish banks to be able to purchase stocks, bonds, and other investments while paying an annually fixed tax on the investments instead of the Swedish capital gains tax of 30% on any profits. The actual tax rate varies with the Swedish reference interest. As long as the overall capital gains exceed a certain percentage (about 2.96% as of 2025), this taxation model is generally more beneficial than paying regular capital gains tax. Losses made through an investment savings account are not, however, deductible.
 
To further encourage Swedish residents to save, each individual’s investment savings account assets (as well as assets on similar accounts) up to SEK 150 000 has now been made tax free. In 2026, this tax-free savings amount is expected to be increased to SEK 300 000.
 
Simplified Rules for EU-Blue Cards
Sweden has since 2009 offered EU Blue Cards as an alternative form of work permit for highly qualified employees. EU Blue Cards do not, however, allow an individual to work freely in other EU-member states. The main advantage compared with regular Swedish work permits is  an EU Blue Card holder, after 18 months of work in one blue card issuing state, is allowed to travel into another member state, apply for a new blue card from that EU member state, and then start their new employment without first waiting for local permit approval.
 
From 2025 onwards, the qualification period for blue card holders to apply for new blue cards from within other EU-member states has been lowered through the implementation of the European Union's new Blue Card Directive (EU) 2021/1883. The minimum salary required for this type of permit has been lowered from 1.5 times the average Swedish salary to 1.25 times. Holders of EU Blue Cards from other EU member states can now enter Sweden and apply to have their EU Blue Card status transferred after 12 months. As of 2025, this places the minimum salary level for a Swedish blue card at SEK 49 875 per month, not including social fees or other employer expenses. An EU Blue Card requires a university degree of three years or more, or a minimum of five years of work experience. Beyond the option of transferring the EU Blue Card status between EU countries, a Swedish issued EU Blue Card does not offer any additional advantages compared to a regular Swedish work permit, and the requirement for obtaining the latter remains lower.
 
Increased Turnover Limits for VAT
To encourage the smallest categories of businesses, the Swedish government has for 2025 increased the limit for how much turnover a company may have before it must collect and declare the 25% Swedish value-added tax (VAT) on its sales. The limit is increased from SEK 80 000 to SEK 120 000 for 2025. This change is expected to serve as a simplification for small companies, often operated as a side business by private individuals, and may, in some cases, enable lower retail prices. It is important to remember that a company that does not collect VAT on its sales is not allowed to deduct the VAT on its purchases, so the option of forgoing VAT registration only benefits certain types of business models.
 
Lowered Requirements for Expert Tax Relief
Sweden has for many years offered a program for granting special tax relief for foreign experts who can either (i) be proven to possess a level of expertise of national significance or (ii) will earn a salary above a certain level for a work assignment expected to last for no more than seven years. To qualify, the employee cannot hold Swedish citizenship, cannot have significant ties to Sweden, and cannot have been a Swedish resident for the last five calendar years. The employer must also be regarded as having a permanent establishment in Sweden. An application for expert tax relief must be received by the authorities no later than 3 months after the start of the employment.
 
If granted, an expert tax relief exempts 25% of the individual's Swedish salary from both Swedish income taxes and employer social taxes. Additionally, the employer is also allowed to provide certain additional benefits tax free.
 
Very few are found to possess a level of expertise of national significance, so most expert tax relief approvals are issued for reasons of the employee receiving a high compensation. The required compensation is, in turn, measured against the so-called income base amount, which is an index-adjusted figure used to calculate many different thresholds and amounts of relevance within the Swedish jurisdiction.
 
The threshold for income-based expert tax relief has now been lowered from two times the income base amount to one-and-a-half times the income base amount. The income base amount has been increased through the annual indexation process. The result is that the lowest monthly salary level (not including social fees or other employer expenses) has decreased from SEK 114 601 to SEK 88 201 per month. The new lower threshold will only be applicable on employments beginning in 2025. The Swedish government is currently considering if expert tax reliefs should in the future exempt 30% of the employee’s salary from taxation instead of the present 25%, but such a change is not expected to take place during 2025.
 
New Patents Act
After many years of preparations, the new Swedish Patents Act took effect on January 1st, 2025. The main purpose of replacing the old Patent Act is to give existing legislation a more rational structure, fully implement the European Patent Convention EPC, and reform the terminology and formalities. These changes are limited to specific scenarios.
 
Among the more noticeable changes are the increased formalized limitations on the patent protection available for computer programs and plant species. These changes serve to align the Patent Act with later legislation. Through the changed legislation it is underlined that software related patents do not bar parties licensed to use said software from correcting errors in the code, create security copies, or run analysis, as long as it is done on the terms which has been set out by the Swedish Copyright Act (1960:729) since 1997.
 
The new Patent Act prohibits patents for plant and animal species. The Act also enables the Swedish government to force patent holders to issue licenses if existing patents are found to bar another party from further developing one or more plant species.
 
Tighter Rules to Prevent Financial Crime
In an effort to fight financial crimes, the Swedish government has on January 1st, 2025, introduced a series of new laws and penalties.

• All economic associations, e.g., clubs and similar associations meant to benefit their members financially, become obligated to submit their annual report to the Swedish Companies Registration Office for review no later than 1 month after their annual member meeting has certified the balance sheet and result. Associations that fail in this obligation will be subject to fines, and if the non-compliance goes on for an extended period, there will be forced liquidation. The rules for such proceedings have are now equivalent to those already applying to limited companies. The new requirement applies to any economic association fiscal year beginning after December 31st, 2024.

• From 2025 onwards, the Swedish Companies Registration Office has been given the right to order anyone who is trying to register a new company officer, as well as the proposed company officer themselves, to visit the authority in person. They also gain the right to summon individuals suspected of giving incorrect information. These new powers are not expected to be put into routine use but are intended to make it easier for the authorities to investigate suspicious registrations and verify the identity of the individuals attempting them.

• False claims to represent a legal entity are now criminalized in cases where the action causes damages or inconvenience for the party which they claim to represent. In many instances, such acts were already criminalized as fraud, but since fraud under Swedish law is defined as an act intended to profit the offender by damaging the defrauded party, the new legislation is intended to close preexisting loopholes.

• The penalty fees for not submitting company annual reports are increased. The separate penalties taken out for initial delays and delays exceeding two months are both increased from SEK 5000 to SEK 7500, and the penalty for delays exceeding 4 months is increased from SEK 10 000 to SEK 15 000. For publicly traded limited companies, each penalty is doubled.

• The maximum prison sentence for nominee company officers, intended to take on formal liabilities in place of the actual decision-makers, and for those who cause them to be appointed, is increased from one year to two years. 

More Beneficial Bookkeeping and Tax Rules for Sole Proprietors
The tax rules for undercapitalized sole proprietorships are adjusted to offer more beneficial adjustments between sole trader income and the category of capital gains, potentially limiting the taxes for some individuals. Certain bookkeeping methods available to small sole proprietorships have also been made more flexible, potentially allowing small operations to potentially manage their depreciations in a more beneficial manner. These changes can be of real benefit in specific situations, though the details and techniques of Swedish bookkeeping procedures for small sole proprietorships fall outside the scope of this article and should be discussed with our bookkeeping department if believed relevant.
 
New Requirement for Work Environment Planning in the Construction Sector
The Swedish construction sector is subject to extremely strict work environment rules, and violations can result in significant penalties for the companies involved. From 2025 and onwards, the work environment rules will be expanded with increased requirements for what plans and policies must be put in place already during the planning stages for a construction project. Most such planning processes are managed by top-level construction entrepreneurs, architects, and scaffolding companies, which would generally have a preexisting staff of specialists for such tasks. The new requirements for the planning process will influence the initial requirements throughout supplier and subcontractor chains in the construction industry.
 
New Tax Rules for Shares Issued with Mandatory Redemption Terms
Shares given out by companies after December 31st, 2024, with the sole option of being purchased back by the issuing company (often with special terms attached), will, in certain situations, be regarded as dividends and taxed according to the value at the time of issuance. This will chiefly apply to situations where such instruments are used as compensation to shareholders in stock buy-back programs or similar setups where a corporation expends company capital for the purpose of diminishing the number of shares in the company and issuing new shares bound to be redeemed as compensation. This legislative change will eliminate certain types of tax planning by decreasing shareholders' ability to delay taxation of their capital gains. The default Swedish capital gains tax is 30% of the profit made through the investment, though special rules exist for some types of companies and investment objects.
 
Changed Rules for F-Tax Certifications
To show that a company or sole proprietor is trusted by the Swedish Tax Authority to correctly declare their own taxes and social fees, the authority issues so-called F-tax (Swe. "F-skatt") statuses to companies who, upon application, can show that they and their controlling principals have no non-compliances of sufficient severity to bar them from this status. This process chiefly consists of checking if the company officers and/or any individual controlling 25% or more of the shares does not have overdue tax debts, though other controls may be undertaken.
 
From 2025 and onwards, it will be possible to apply for temporary F-tax status as well as permanent ones, for parties who will only need it for a limited period. At the same time failure to repay such tax subsidies given for household services which has later been found to be incorrect will be added to the list of non-compliances which can bar companies and individuals from receiving or retaining an F-tax status. The latter change is aimed at decreasing the instances of repeated non-compliance in the household service sector.
 
Sweden Phases Out the Interest Deductions of Loans Without Collateral
Sweden has for many years allowed individuals tax deductions corresponding with 30% of their interest expenses up to a certain limit (currently set at an interest expense of SEK 100 000 per year) and to correspond with 21% of their interest expenses above said limit.
 
To discourage potentially unsafe lending practices, the Swedish government has now decided that the interest deductions on all loans not secured with sufficient collateral will be gradually phased out. For the tax year of 2025, the interest on loans without or with insufficient collateral will, therefore, only merit half the deduction as would have applied to a loan with sufficient collateral, and the interest deductions on loans without collateral will continue to decrease during future years. The amount of collateral required for a specific loan to be subject to the maximum interest deduction will be determined in accordance with the rules for the specific credit type.