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Sweden to keep record-low interest rate in 2017

Sweden's central bank has announced that the country's record-low interest rate of -0.50 percent will remain in place longer than previously planned, with the rate now not due to be changed until 2018.

Published: 27 October 2016 10:28 CEST

Sweden to keep record-low interest rate in 2017

Sweden's landmark negative interest rate will continue towards 2018. Photo: Anders Wiklund/TT

Earlier this year the Riksbank said that uncertainty caused by Britain’s vote to leave the EU meant the country’s negative interest rate would stay in place until the second half of 2017. On Thursday however it announced that the rate will now remain unchanged until early 2018, sighting a slower than expected rise in inflation.

“The Riksbank now assesses that it will take longer for inflation to reach two percent. The upturn in inflation therefore needs continued strong support,” the Riksbank wrote in a press release.

Sweden took the landmark decision to slash the repo below zero in February 2015, hoping that the financial strategy would boost inflation to raise the price of everyday goods and services which had been stagnant in recent years, and therefore improve the Nordic nation’s economic prospects.

It now predicts that inflation will reach 1.4 percent in 2017, a downward adjustment from the 1.8 percent forecast in a previous estimation. By 2018 the Swedish central bank expects inflation to reach 2.2 percent.

“However, in recent months inflation has slowed down, which illustrates the uncertainty over how quickly inflation will rise towards the target,” the Riksbank's press release explained.

The Riksbank also noted that a monetary policy meeting in December could lead to an extension of its programme of purchasing government bonds. By the end of 2016 it will have purchased bonds worth 245 billion kronor ($27.5 billion).

Thursday’s announcement did not immediately lead to any strong reactions, with the Swedish krona weakening marginally against the US dollar and the euro.

What to do if you can't meet Tuesday's Swedish tax declaration deadline

When exactly is the Swedish tax deadline and what help can I have to meet it?

The deadline falls on the stroke of midnight on Tuesday May 2nd, so you still have a few hours to get your declaration together.

Sweden may have relatively high taxes, but the Swedish Tax Agency seeks to make paying them as easy as possible.

If you have any questions, it is well worth ringing the helpline on 0771-567 567.

Unlike the helplines of the tax offices in most other countries, the helpline is well-staffed with informed people who go out of their way to help you.

The agency also has a good quide in English on how to file your return.

What happens if you miss the deadline?

If you fail to submit your declaration by midnight, you are at risk of having to pay a fee of 1,250 kronor, but this won’t necessarily happen. There is an element of discretion, and if you filed your return at 0.15am on May 3rd, you may well be let off.

In any case, before the charge is taken out of your tax account or skattekonto, you will first receive a note informing you of possible impending late charge, which you can then appeal.

So if you fell ill on May 2nd, or the internet broke down at your apartment at 11.55pm, you can inform them when you receive this note and you may be able to avoid a fine.

If in a further three months (August 2nd), you still haven’t submitted your tax declaration, you risk a second 1,250 kronor fine. Finally, after five months (October 2nd), you risk a third fine of 1,250 kronor.

How to get an extension if you are self-employed

You can extend the deadline until May 16th by logging into your page on the Tax Agency’s website or calling them on 0771 567 567 (or +46 8 564 851 60 from outside Sweden).

To find the extension form, go to the Mina Sidor page on your Tax Agency account, press the Skatter och Deklarationer link near the bottom, and then press the Anstånd med inkomstdeklarationen link and filling in the form.

Jan Janowski, a declaration coordinator at the agency, said that the agency prefers for people to do this than to knowingly submit an incomplete or inaccurate declaration.

“We want people to live their declaration in as complete a form as possible, but if you are still waiting for some supporting documents we would like people to apply for an extension.”

If you have an accountant, they can apply for all of their clients’ income declarations to be delayed until June 15th in a measure called byråanstånd, intended to help them with the last minute rush to declare.

This, however, has to be done for all of their clients and isn’t something they can do for you just because you are late.

Is it better to file an incomplete declaration than a late one?

If you feel unable to file your declaration even on May 16th, what’s holding you back is likely to be something like declaring capital gains tax on share or property sales, or confusion over calculating one of Sweden’s many tax deductions, such as the ROT or RUT deductions for cleaning or home maintenance.

If you are employed, the most important element of your tax declaration – your income from your job – will already be filled in on the paper or online form.

Declaring your main income from employment is just a question of checking that the details Skatteverket already has are correct and submitting a declaration either using Skatteverket’s app, or by sending a text message including your personal identity number and signature code to 71144 from within Sweden, or by calling 020 567 100 and following the instructions.

If you are still wading through spreadsheets of share sales, but have no issues with the Tax Agency’s record of your income from employment, you can make the declaration but inform the agency that you may have other capital gains or other income to declare later on.

If you do this, it’s good to be as transparent as possible with the agency about what information you are waiting for when you make your declaration.

To do this, find the andra information, or “other information” section in the declaration, and write down, in either English or Swedish, what information you are waiting for.

You could write, for instance: “I sold an apartment in Florida in 2022 but have yet to receive details of the proceeds and am waiting for my accountants in the US to calculate the capital gains.”

If you do this, you are much less likely to be fined if the Tax Agency later discovers any undeclared gains.

How long do you have to make changes to your tax declaration?

Until the Tax Agency makes a tax decision, normally in June, you can resubmit your tax declaration using the same form on the website you used to declare it the first time, and the agency will use the most up-to-date declaration when calculating your taxes.

Even after it has made a tax decision for an income year, the agency is liberal about any voluntary changes made in future.

Once a declaration has been made, you can still request changes to the final tax decision based on new information or corrections you have made for up to five years.

For the first 12 months after the end of the taxation year (IE, until January 2024), the tax agency will never levy a so-called tax surcharge (skattetilläg), even if one of its officers discovers that someone has failed to declare, or falsely declared, some earnings or income in your return.

After the first 12 months, if you bring undeclared income or falsely claimed tax breaks voluntarily to the tax agency’s attention before the agency discovers it, you are also likely to avoid a surcharge.

What happens if the agency catches you not declaring income or falsely claiming rebates?

If you are caught evading taxes or make a mistake, the penalty is set quite high. You have to pay the tax you should have paid, plus a 40 percent surcharge.

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