Working abroad for an Irish company. Am I liable for local tax?

Hi,

I am currently working in Sweden but being paid from an Irish company. I am on a (roughly) 6 month assignment. The people in the Sweedish office are asking that I fill out a 'Right of Residence' form, which I have not yet done.

What I need to know is what are the consequences of this for me, if any?

I have asked my colleagues and they have given me very varied responses! What I gather is that if I stay here over 183 days (per 365) then I am liable for Swedish taxes, which are very high.

Any info would be greatly appreciated.

I would assume that this would be no different to the reverse situation where someone in Ireland works for a Swedish company. I would assume that the Irish workers in the soon to be opened Ikea store will be paying Irish tax.

Tax residency is determined by the number of days you spend in a particular country. In general terms, where you spend most of the year is where you pay your taxes. Though would be worth checking out the detail of the double taxation agreement between Ireland and Sweden to see if any variation or flexibility.

When you work in another EU

When you work in another EU state the best plan on a short contract is to get your Irish employer or yourself to apply for a form E101 from the Irish revenue. This will allow you to be retained on the Irish social insurance scheme whilst working in Sweden. Rember you will have to now pay tax in whatever eu state that you are working in, however for contracts of less than one year use the E101. Remember the most costly and expensive part of the income deduction in Sweden will be the Swedish social insurance payment therefore use the Irish system which is much more affordable. I would guess that the actual income tax would be close to the Irish rate.

It is now a legal requirement to register as resident if you are working in any EU state even for a short term. The Swedish system will then issue you with a number for tax and social purposes same as PPS No. Your employer in Sweden will also need this number. They basically need to know who you are, what you are at, who you are doing it with and pass your details on to Police computer ect. Thats Europe now !

However it would pay you to get advise in Sweden from an international tax advisor / accountant.

Hope this helps

Cheers !

Tormented said:

The Swedish system will then issue you with a number for tax and social purposes same as PPS No. Your employer in Sweden will also need this number.

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Thanks for the info, just one thing, even if not paying tax there - they still require me to have a 'PPS' number when I'm working in the country? Having this number doesnt automatically mean I have to pay tax, right?

I hear the Swedes complaining all the time about their high taxes so that is why I am a little concerned about this!!

Hi Gavin,

the current maximum income tax rate in Sweden at present is0- 56%, which I believe includes a social insurance payment element. I am still adamant that you will have to pay Swedish income tax but not the social insurance element. I would advise you to get advice from a Swedish international tax advisor/ accountant.

The swedish social welfare system is financed primarly from taxes, but you should not have to pay the social insurance element, when you are already paying it in Ireland as you are entitled to do. I do not think that the Swedish employer will let you remain working if you do not register your details, before you do this you really need to get expert advise on this one.

Wish I was more help