This is a clear sign that Sweden has difficulties to attract competence and enterprises when it comes to international competition.

In comparison with other countries, the Swedish tax on capital gains are very high.

Examples of taxation in Sweden/ EU/OECD

Capital gain 50,000 SEK
Holding time          Tax Sweden     Tax OECD     Tax EU
3 months                         30%                   11%          12%
2 years                             30%                     7%           8%
5 years                             30%                     7%           6%

Source: Aktiespararna

If you choose to establish abroad the Swedish capital taxes can largely be avoided. However, this requires that you plan and invest properly in order to use the regulatory framework in an advantageous way.

The 10-year rule in practice
Even after you have moved from Sweden, you will be taxable in Sweden for your capital gains on shares. This is according to the 10-year rule which means that profits are taxed at up to ten years after the move occurred. The tax rate is 30%. As of January 1st 2008, foreign shares are also covered.

Taxation after the relocation
The consequence of the 10-year rule is that if you own shares when relocating, or if you buy shares after the relocation, and within 10 years after sell shares the profits on the sale will be taxable in Sweden with 30% tax.

The 10-year rule has in some tax agreements been reduced to fewer number of years (in some contracts zero years). In cases where the new country taxes the capital gain, the Swedish tax is usually offset in order to avoid double taxation.


Swedish endowment insurance has several advantages
One way to avoid the 10-year rule when you establish abroad is to place your assets in a Swedish endowment. This way you avoid the Swedish capital gains tax, which instead is replaced by a so-called standard tax rate (currently 1.05% per year). Your tax is thus 1.05% of the value regardless of how much your shares are rising. A further advantage is that you do not need to declare the annual K-attachments when you sell shares.

The only thing that is declared is the value of your insurance at the end of the year. The disadvantage of endowment is that the standard tax rate is levied even if your investment decreases in value. Within the framework of the endowment, you can place quite freely in shares, mutual funds, bonds etc.

                                                                                 Tony Harkén