Filing and Payment

For most companies, the income year is the calendar year. Income years ending on 30 April, 30 June and 31 August are also permitted. Other dates are allowed if application is made to the National Tax Board. A company should normally file a preliminary return before 1 December of the year before the income year. A preliminary assessment is then issued, which indicates the advance tax to be paid during the income year. Advance tax payments are made in 12 equal instalments, generally the 10th day of February - December of the income year and in January of the assessment year, which is the year following the income year. All companies file their annual tax return on 31 March of the assessment year, unless an extension is granted.

The final assessment is issued in November/December. If the final tax exceeds the total amount of advance tax payments, the difference must be paid to the tax authorities on 18 April in the year following the assessment year. The tax authorities refund overpayments in December of the assessment year.

Individuals must pay income tax each fiscal year, which ends on 31 December. Net worth tax is levied on the value of net taxable assets on the same date. The year of assessment is the calendar year immediately following the fiscal year.

Annual tax returns must generally be filed no later than 2 May during the year of assessment. Individuals with business income must use the calendar year as their financial year, and their filing deadline is 31 March. Taxpayers may obtain extensions of time to file returns.

Tax payments for salaries, wages and other remuneration, including benefits in kind, are made through withholding. The employer withholds the tax, known as the A-tax, according to either preliminary tax tables or an advance assessment. Amounts withheld, together with social security taxes, are paid to the authorities the following month.

Individuals who are self-employed or who have business income as well as other non-employment income may register as F-tax payers. Preliminary tax is then computed through the use of a preliminary tax return. Preliminary taxes are generally payable in 12 equal instalments on the 10th of February - December and January.

During August (individuals with only salary and capital income) or December during the year of assessment, when final assessments are made, individual taxpayers receive a final tax bill showing the total amount of income tax liability. Any difference between this amount and the preliminary tax paid is refunded immediately. If the difference is an amount due, it must be paid in April of the following year. If an individual is employed, his or her employer must withhold the additional tax due during the months of January, February and March the following year and pay this to the authorities.

VAT must be reported on income tax returns if annual taxable turnover is SEK 200,000 or less. If annual taxable turnover exceeds SEK 200,000, taxpayers must register and file with their county tax authority.

Tax Appeals

If the amount of tax assessed by the local tax authority differs from the liability stated in a company's tax return, the company will receive a deviation notice. The company may contest the notice and request a reassessment. If the request for reassessment is not accepted, the company may either renew its request as many times as it finds necessary during a five-year period or appeal to the regional administrative court by filing an appeal before the end of the five-year period following the assessment. A decision of the regional court may be appealed to the administrative court of appeal; final appeals are made to the Supreme Administrative Court. The same rules are applicable for individual taxpayers.

Tax Audits

The Tax Director may determine that a tax audit is necessary or be requested to perform one by the assessment committee. The audit consists of a thorough review of the company's accounting records, resulting in a final determination of the company's tax.

Individuals are seldom subject to tax audits.

Penalties

Penalties are imposed as follows:
- For the late filing of a return, SEK 1,000 for a limited liability company and SEK 500 for an individual;
- For the late filing of a return after the reminder-to-file period,
SEK 4,000 for a limited liability company and SEK 2,000 for an individual; and
- For the incorrect reporting of income by a limited liability company or an individual, a 40% penalty on the additional tax due, or 20% if the tax authorities had the information available to assess the correct tax.

A penalty may also be imposed if the company has losses.

Statute of Limitations

Taxes may be reassessed for up to five years after the end of the assessment year if any of the following apply:
- An incorrect return was filed or necessary additional information was not provided.
- The taxpayer caused too little tax to be assessed.
- The assessment was too low or called for no tax.
- A substantial amount of tax was not assessed.

The contents of this article are intended as a general guide to the subject matter. Specialist advice should be sought for your specific circumstances.

For further information contact Per Snellman on Tel: +468 613 9000 0r Fax: +468 791 7511; or enter a text search 'Ernst & Young' and 'Business Monitor'.