Sweden: Employers’ Filing Requirements Extended

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By Marcus Hoy

Feb. 16—Employer monthly reporting obligations will be expanded Jan. 1, 2018, to include salary levels, employment benefits and withheld tax, Sweden’s Tax Agency announced. Employers are currently required to report only contributions and tax deductions on a monthly basis; information on withheld taxes, salary and benefit levels are reported annually

Designed primarily to reduce tax and benefit fraud, the proposal would also allow the information provided by the employer to be shared across a number of government agencies whose access is currently restricted.

The draft law proposes that Sweden’s Social Insurance Agency, Migration Agency, Public Employment Service and Public Prosecutor's Office be allowed automatic access to the data. Two other bodies, the Swedish Enforcement Authority and the Tax Agency’s Fraud Unit, already have the right to view the information.

Increased Efficiency

According to the Tax Agency, the proposal will streamline the system of employer reporting and make administrative and auditing procedures more efficient and timely. The current regime does not allow the authorities or individuals to determine if employers are compliant with tax obligations before annual information is submitted, and the process of rectifying errors after the fact is often costly.

In a Feb. 9 statement, Tax Agency head of unit Magnus Wallin told Bloomberg BNA that the possession of the most up-to-date payroll data would help the agency combat fraud and make more informed decisions

“Continuous access to data on payments will provide opportunities to detect errors at an earlier stage,” Wallin said “This is advantageous in several respects and will improve the conditions to determine and collect the right taxes.”

Low Cost?

The increase in costs for employers would be marginal, Wallin said, as little as 400 kroner ($47) per year.

“This should take into account the increased efficiency of the new reporting system,” Wallin said. “There will also be opportunities to reduce companies' submission of information to other agencies.”

Lene Gewers, senior tax manager at accountancy firm BDO, agreed that the new rules would streamline the existing system but added that they could still increase bureaucracy for some companies.

“This change may well cause administrative burdens,” Gewers told Bloomberg BNA in a Feb. 12 statement. “A form or file must be submitted for each and every employee each month. However, with a good payroll system in place, it may be implemented in place of the existing employer return.”

To contact the reporter on this story: Marcus Hoy in Copenhagen at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

For more information on Swedish HR law and regulation, see the Sweden primer.