Legal Changes 2023

A new year always brings with it new legal changes. Below we have summarized some of the more important legislative changes that will come into effect on in the early parts of 2023.

Mandatory Data Collection from Online Platforms

Under newly introduced legislation, all companies which provide online platforms facilitating transactions in Sweden, such as, for example, the sale of goods from one party to another, will be obligated to go through a new type of registration process with the Swedish Tax Authority (Swe. “Skatteverket”) no later than June 30th, 2023. These rules will apply to the major international platforms, such as Amazon, eBay, and Uber, as well as to smaller operators who facilitate sales and similar transactions in the country.

The platform companies will, thereafter, be obligated to provide regular information to the Tax Authority detailing which parties have sold goods and/or services in Sweden. This information will be used to check if the correct Swedish taxes and/or social fees have been paid by the parties who profit from Swedish online transactions. In cases where a transaction falls under a different country's tax jurisdiction, the Swedish Tax Authority will, within the framework of the existing treaties, be able to transfer data to said foreign jurisdictions to aid in the enforcement of international tax treaties.

Temporary Tax on Extraordinary Profits for Certain Companies During 2023

Companies that derive 75% or more of their net turnover from the extraction of raw petroleum, natural gas, and/or coal, the refining of petroleum, and/or the refining of coal will, during next fiscal year, have to pay a temporary tax on any portion of their profits which exceeds 120% of their average profits during the period 2018-2021. This temporary tax has been set to 33% of the “extraordinary” portion of the profit, which will, at the same time, be subject to the normal Swedish corporate gains tax of 20.6%. The temporary tax will take effect on January 1st, 2023, and remain in effect for the whole duration of any fiscal year that begins during 2023. Herby companies which start their fiscal year late in the year will be affected by the temporary tax for much of 2024. The temporary tax is partially based on the EU regulation 2022/1854, which was issued on October 6th, 2022.

The Car Climate Bonus is Discontinued

The subsidies for individuals who purchase new electrical and hybrid cars have been discontinued from November 8th, 2022, but individuals who purchased a qualifying vehicle for use in Sweden before that date can still apply for the subsidy of up to SEK 60 000. If such cars are registered for road use after January 1st, 2023, this subsidy will, however, be limited to a maximum of SEK 50 000 for purely electric cars and a maximum of SEK 10 000 for hybrid cars. The exact tax subsidy for a specific car would be calculated based on its purchase price and how much carbon dioxide it releases per kilometer.

Lowered Taxes for Elderly People Who Work

As a continuation of recent year’s political agenda to improve the finances of Sweden´s elderly, the preexisting salary tax reductions for working individuals who, at the start of the fiscal year, were 65 years or older will be increased. The maximum tax reduction will be increased from 20% to 22%, a percentage which will then decrease for higher incomes. The maximum tax savings generated by these reductions will, in turn, increase from SEK 30 000 in 2022 to SEK 36 000 in 2023.  Said maximum tax savings will apply to seniors who, through their employment(s), earn annual salaries between SEK 300 000 and SEK 600 000 before taxes during the fiscal year. These reductions are not applicable to business income or capital gains. Individuals earning a salary income of SEK 1800000 or more during the fiscal year will not benefit from said tax reductions. The tax reductions will be reflected in the governmental tax tables.

Employees Are given the Right to Keep Working to 69 years of Age

In an effort to encourage more individuals to work into their old age, the age at which an employee can be forced to retire by their employer is increased from 68 years to 69 years. Employees below the age of 69 can still have their employment terminated for reasons of redundancy or severe personal misconduct, but their employment cannot be terminated for reasons of their age.

At the same time, the minimum age to draw upon public old age pension earnings is increased from 62 to 63 years of age, and the minimum age required for the various welfare programs directed towards the elderly is increased from 65 to 66 years of age. Elderly employees who wish to work after their 69th birthday can continue to do so if their employer allows it, and employees who have been lawfully retired by their old employer can, if they wish, look for a new employment. The act of declaring an employee retired due to them reaching 69 years of age does not obligate their employer to provide pension funds beyond what they had already provided up to that point or committed to through binding agreements.

The Waste Incineration Tax is Discontinued

The Swedish government will on January 1st, 2023, discontinue the Swedish waste incineration tax of SEK 125 per ton, which has previously been taken out from parties licensed to incinerate waste for the purpose of heating and the production of electricity. The reason given is a report from the Swedish Tax Authority stating that the tax was not a cost-efficient way to decrease the amount of released greenhouse gases.

Legal Requirement to Register House Cats

On January 1st, 2023, it becomes mandatory for all owners of domestic house cats to have the animal injected with an ID-chip and registered in a new digital register kept by the Swedish Board of Agriculture (Swe. “Jordbruksverket”). The chip can be inserted by a veterinarian or other qualified professional. The cat’s owner can then register the chip’s ID-number online or through a government form for a small fee. Those cat owners who have already voluntarily equipped their cat with a chip will, as a rule, be able to register the preexisting chip’s ID number with the Swedish Board of Agriculture. Failure to register a cat makes it harder to determine its owner in case it is lost. If the owner’s failure to register it is discovered by the Swedish authorities it may lead to a warning, and, if the warning is not heeded, the cat owner will be fined.

Highest Price Base Amount Increase in 40 years

To help reflect inflation and cost of living in matters of taxation, insurance, and benefits, the Swedish government establishes several different base amounts each year. The purchasing power of each year’s base amounts are supposed to be about the same, and one of the most commonly used base amounts is the so-called price base amount (Swe. “Prisbasbelopp”).

For reasons of the increased cost of living during 2022, that Price Base Amount will on January 1st, 2023, increase from SEK 48 300 to SEK 52 500, e.g. with about 8.7%. This is the single largest increase in more than 40 years and can be compared with the increase of about 1.47% which took place between the years 2021 and 2022.

The increased Price Base Amount will have many effects throughout Swedish society, from increasing governmental benefits and pensions to slightly decreasing the personal income taxes. For individuals with an official gross salary of SEK 60 000 per month, this change is expected to decrease their personal income tax by SEK 1550 per month, unless their home municipality has increased the local municipality tax.

Changed Rules for Housing Associations

As a measure to clarify the rights and obligations of equity-holding members of Sweden´s many housing cooperatives (Swe. “Bostadsrättsföreningar”) a number of new or clarified legal provisions have been will come into effect on January, 1st, 2023.

Going forward, any and all “significant” changes to housing associations apartments (Swe. “Bostadsrätter”) are subject to approval by the association board. The definition of significant changes is, in turn, clarified to include any installation of sewage pipes, heat, gas, or water, as well as any installation or change involving ventilation, fireplaces, chimney pipes or fire safety. With regards to apartments with particular historical, cultural, environmental or artistic values, any measures which may impact said values would also be subject to association board approval. Some changes of the here listed types were already before the legal change regarded as significant changes subject to board approval, but the new legislation clarifies and expands the board’s authority and voids any clauses in an associations Articles of Associations if they give blanket approval for any of these types of significant changes. Measures such as changes to load-bearing walls have long since been subject to board approval.

If the board of a housing association does not approve a proposed renovation, their decision can, under the new legislation, be appealed to the local Rent Tribunal instead of the more costly County Court (Swe. “Tingsrätt”) proceedings previously required in case of an appeal.

 If a housing cooperative member, on the other hand, carries out a regulated type of change in their apartment without the approval of the association board they will, however, risk having their membership canceled and forced to sell their equity in the association and the associated right to use the apartment. Construction companies producing new homes intended to be owned by cooperative housing associations will, in turn, have an increased obligation to provide clearer information about their production timeline and the risks involved, which includes the risk of losing the apartment purchase sum in the rare event of the housing association becoming bankrupt.

Increased Tax Reductions for Solar Panels

The preexisting tax reductions for solar panel installations purchased by private individuals for their own homes will increase from 15% to 20% of the total cost of work and materials. The maximum reduction for this and other subsidies forms of green energy investments will, however, remain SEK 50 000 per person and year. The increased tax reduction will apply to all solar installations for personal use paid for after January 1st, 2023, even if the installation itself took place in 2022.

Temporary Measures to Limit Fuel Costs During 2023

In an effort to combat the increased fuel prices, the Swedish government has introduced a number of measures. The Swedish fuel retailers have, for the duration of 2023, been freed of the preexisting legal requirement of adding a minimum of 30.5% renewable fuels to all fuels sold in Sweden, as well as the steep penalty fees which were previously paid by those fuel retailers who failed to live up to said requirement.

The general fuel taxes on petrol and diesel will, furthermore, for the duration of 2023, be temporarily decreased by SEK 0.8 per liter. After VAT, this tax reduction is expected to lower consumer fuel prices by SEK 1 per liter. The taxes on the so-called low-taxed oils, which are intended for non-propulsion-related purposes such as heating and are artificially market with green dye, will for the same period be decreased by SEK 722 per cubic liter compared with inflation-adjusted tax rate that would otherwise have applied for 2023. The total taxes on green dyed low tax oil have thereby been set to SEK 4072 per cubic meter for 2023, which can be compared with the 2022 tax rate of SEK 4411 per cubic meter.

Tightened Rules for Practice Drivers

Starting January 1st, 2023, it will be punishable with a fine to practice drive with a private individual instructor without the pupil having a valid ID. It will, furthermore, be easier for the police to issue fines to individuals who are helping others practice for their driver’s license without both parties holding the proper training permits.