Tax Authority: ‘we do all the calculations for you’

Sweden’s Tax Authority (Skatteverket) has done all that it can to ensure that in most cases filing takes only a few minutes.

“We do all the calculations for you,” said Skatteverket’s Kaj Kojer to The Local.

Having already sent out paper forms to approximately 7.4 million tax filers, the agency expects about 60 percent to submit their final tax declarations electronically—via telephone, internet, or text message.

This year, additional forms have been added to Skatteverkets online tax filing system, one dealing with the sale of single family homes (Form K5) and the sale of apartments (Form K6). In addition, all individual business owners can file their forms online using the new business form (Form NE).

Moreover, tax filers will find that the electronic versions of their tax forms actually have more information than the paper versions when it comes to stock and real estate sales, and business activity.

As Skatteverket receives the bulk of its information from banks and employers, the information is generally “high quality and very accurate,” according to Kojer.

On the rare occasion that a mistake does crop up, it is often because an employer either failed to submit or sent in faulty information about the wages earned by an employee.

“In that case, that person can simply change the figure online and then tell their employer to submit the correct information,” said Kojer.

In most cases, however, filing taxes electronically in Sweden is a rather quick affair.

“If everything is in order, it can take about 20 seconds,” explained Kojer.

Of course, questions undoubtedly come up along the way and when they do, Kojer urged people to simply pick up the phone.

And don’t worry if you can’t speak Swedish—Skatteverket has operators trained to answer questions in several languages.

“It’s better to call and avoid making some mistake which could end up being quite costly.”

According to Kojer, non-Swedes make many of the same mistakes that Swedish citizens do when filing their taxes such as calculating deductions correctly or accounting for capital gains.

Sometimes people also have difficulty knowing what qualifies as a business expense.

In one instance, a foreign businessman ran into trouble due to what Kojer explained as “some wrong assumptions based on common practices in his home country.”

“He wanted to list payments made to public officials as a business expense,” said Kojer.

Kojer also pointed out a couple of significant changes which taxpayers should bear in mind when filing their forms this year.

First of all, the long-running tax on wealth has been abolished, meaning people are no longer levied a 1.5 percent charge on wealth exceeding 1.5 million kronor ($250,000) for individuals.

“This is a big change,” said Kojer.

In addition, the minimum level required to qualify for certain itemized deductions have also changed.

Individuals now must incur at least 8000 kronor in travel related expenses, up from 7000 kronor, to qualify for a deduction. And the level required for a general business expense deduction has been raised from 1000 kronor to 5000 kronor.

The general income tax deduction, which is calculated as a percentage of salary, has also been raised somewhat, resulting in a mean reduction of about 7000 kronor per person.

There is also a new capital gains tax rate of 22 percent for profits stemming from the sale of real estate, up from 20 percent last year.

But Kojer emphasized that a different rate of 30 percent applies for gains from the sale of stocks and other financial instruments.

Of course, keeping track of all this information is really more of an academic exercise for the majority of tax payers, as it is ultimately Skatteverket which ends up doing the calculations.

Rather than leaving all the information collection up to the individual, Skatteverket instead bears the burden of gathering and calculating information accurately, which they then send along a pre-filled form to taxpayers for review.

In general, explained Kojer, Skatteverket strives to be seen more as a “service agency” than a “controlling agency”, and is viewed as such by the Swedish public.

“The approach in Sweden and the Nordic countries is somewhat different than much of the rest of the world,” he said.

Kojer admits that having a state agency keep such a close eye on one’s financial dealings may seem a bit intrusive or strange for people from other countries, but believes that Swedes have just become accustomed to it—perhaps in part because they appreciate the fact that Skatteverket has done much the legwork for them when it comes to filing taxes.

“It seems Swedes find it easier to accept that the authorities are working for you and not the other way around,” he said.

“They find the tax authorities more reliable and trustworthy.

And with more and more people electing to file electronically, Kojer sees benefits for both the agency and taxpayers.

“It’s better for everyone. People can get their tax refunds by Midsummer (June 20) and there is a higher degree of accuracy,” he said.

And are Kojer and his Skatteverket colleagues disappointed that Denmark has overtaken Sweden as the country with the highest tax burden?

“Oh, yes, we are very sad about not being number one,” he joked, tongue in cheek.

“With taxes so high in all the Nordic countries, a change of a percentage point or two doesn’t make much difference.”