Global Daily Tax News, Sweden Eyeing Tax Breaks For Autumn Budget, (Sep 19, 2025)
Ahead of the delivery of the nation's new Budget on September 22, 2025, the Swedish Government confirmed new tax breaks for businesses and a plan to reduce VAT on admission to dance events.
The Government has indicated that it will spend SEK80bn (USD8.54bn) in the Budget to support Sweden's recovery from recession, including support for households.
Measures worth about SEK7.2bn have been allocated to reduce tax for companies. Specifically, the Government has said it will temporarily cut employer contributions by a third for hiring young people between the ages of 19 and 23. The measure will apply between April 1, 2026, and September 30, 2027.
Further, the Government has committed to deliver simplifications and improvements to the 3:12 regulations.
The so-called 3:12 rules set out how much profit a stakeholder can withdraw as a dividend and pay 20 percent tax, with the remainder taxed as income at progressive rates.
The Government set out plans for reform in May this year. It proposed making the tax system simpler, in particular by merging the two calculation methodologies: the main rule and the simplified rule.
Under those proposals, the amount liable to tax at 20 percent would be calculated based on salaries paid by the company and its subsidiaries.
The Government previously said it anticipates that the 20-percent tax rate will be applied more broadly, typically limited to a closely held company's distributions up to approximately SEK320,000 (USD33,636).
Confirming that reforms to the 3:12 rules will be included in the Budget law, the Government said: "The proposals mean that over 60,000 entrepreneurs will receive reduced taxes and that the administrative burden will be reduced by one third."
The changes would become effective from January 1, 2026.
Finally, the Government has announced plans to cut the rate of VAT on admission to dance events from 25 percent to six percent. The change will take effect from July 1, 2026.