Bookkeeping in Sweden

Swedish bookkeeping covers all legal forms of business, from sole proprietorships to companies to subsidiaries and foundations, and consequently, whichever form you choose and register with the Bolagsverket (Companies Register) and the Skatteverket (Tax Office), you are obliged to comply with all rules and laws governing its bookkeeping and accounting. Swedish bookkeeping covers, among other things, such issues as taxes, invoices, tax declarations and generally all company documentation that must be kept in accordance with Swedish rules, deadlines and standards, so that by neglecting the bookkeeping duties of your company you do not expose yourself to inspections and penalties from the Swedish authorities. What exactly does accounting in Sweden do? What laws regulate Swedish accounting? What are Swedish accounting accounts? How do you issue an invoice in Sweden? In the chapters below, you will find the answers to these and other questions. When you decide to set up a business in Sweden, you have to be aware that your company's accounting, regardless of the legal form you choose, must be done both in accordance with the guidelines and standards of the member states of the European Union and the Organization for Economic Co-operation and Development, as well as the laws governing Swedish accounting: årsredovisningslagen (Annual Accounts Act 1995) and bokföringslagen (Accounting Act 1999).

Swedish accounting covers such matters as:

1. consulting and advisory services;
2. day-to-day accounting;
3. recording of the company's transactions;
4. filing of annual returns, tax credits and tax refunds;
5. VAT returns (MOMS);
6. company documentation;
7. assistance with business registration with Bolagsverket (Swedish Companies Register), Skatteverket (Swedish Tax Agency), Försäkringskassan (Swedish Social Insurance Agency);
8. benefits and contributions;
9. payment of advance income tax;
10. payment of taxes and employee contributions;
11. adjustment of tax settlements;
12. health insurance;
13. Assistance in the preparation of documents for the audit, which in Sweden is carried out by qualified auditors such as revisor godkänd (approved auditor) or auktoriserad revisor (authorized auditor) to check the correctness of the annual reports of companies (concerning Aktiebolag - AB - limited liability company; Ekonomisk fӧrening - business association; Handelsbolag - HB - trading company).
14. Invoicing (e-invoices as standard - Svefaktura).
15. Settlement with the tax authorities (Skatteverket).
16. Assistance with setting up a company account.
17. Keeping the company's accounts in accordance with Swedish laws and regulations.
18. Recording the course of business events.

The Swedish Accounting Standards Board, Bokföringsnämnden (BFN), oversees the regulations and rules on accounting in Sweden. In Sweden, the accounting accounts, which form the chart of accounts, are used to record company business events. The Swedish chart of accounts, on the other hand, is an arrangement of accounts adopted in a given business entity in order to keep the company's economic records clearly. The chart of accounts, by means of a detailed list, shows the order of the individual accounts in the ledger.

The standard chart of accounts in Sweden indicates the scheme for qualifying a given economic event, and the entry of each accounting account consists of 4 digits. A Swedish entrepreneur can configure the chart of accounts to suit the needs of his or her own business, or use the standard Swedish chart of accounts - BAS - which contains the pattern of qualification of a business event.

Swedish chart of accounts:

1. 1000 - company assets (fixed assets);
2. 2000 - company equity and debt (settlements with banks, suppliers, authorities);
3. 3000 - company revenue (net revenue invoices);
4. 4000 - purchases (domestic, foreign, purchase of materials);
5. 5000 - company operating expenses (e.g. advertising, business trips);
6. 6000 - company operating costs (e.g. purchase of tools, office supplies, work clothes, costs of hiring temporary staff);
7. 7000 - employee costs and depreciation (cash equivalents, benefits in kind, salaries);
8. 8000 - finance costs and income (e.g. loan interest, company annual profit).

In Sweden, the type of business determines both the degree of difficulty of accounting and the detailed range of issues and responsibilities associated with it, and consequently, the accounting of Swedish companies such as Aktiebolag or Enkelt bolag is much more complicated than the accounting of a sole proprietorship - Enskild nӓringsidkare - and requires expert knowledge, knowledge of laws, regulations as well as accounting principles, which is why the owners of the former often choose to put accounting in the hands of professionals. The Revisorsinspektionen website can help in choosing both a qualified accountant and a professional accounting firm in Sweden. Accounting for a Swedish sole proprietorship is not complicated and can be done independently. The Swedish tax authority - Skatteverke - treats the income from running an Enskild näringsidkare as income for the business owner, so business tax is declared on a single tax return and the business owner, who pays taxes and contributions, is entitled to pension and health benefits the same as those who are employed in Sweden.

Accounting for a sole proprietorship includes issues such as:

1. assistance with both completing and submitting the application (form SKV 4620) for a personal identity number personnummer (or samordningsnummer) and registering the sole proprietorship with the Companies Register (Bolagsverket), the Tax Agency (Skatteverket) and the Social Insurance Agency (Försäkringskassan);
2. maintaining day-to-day accounting, invoicing and registration of all company transactions;
3. assist with both the registration of the Enskild nӓringsidkare as a VAT payer (Mervärdesskatt) when the company intends to engage in the sale of services and goods, and the submission of monthly, quarterly or annual VAT returns (MOMS). In Sweden, the VAT percentage rates are: 25% (standard rate), 12% (reduced rate e.g. hotels, handicrafts or foodstuffs) or 6% (low rate e.g. books, passenger transport, newspapers);
4. maintenance of company records;
5. payment of income tax, which in Sweden is calculated on the basis of the income earned by the company in a given tax year. The income tax rates for a Swedish sole proprietorship for 2020 are: with income between SEK 0 and 490 700, 30-35% (local tax) and 0% (national tax); with income higher than SEK 509 300, 30-35% (local tax) and 20% (national tax);
6. payment of advance income tax by 17 January, 12 February, 12 March, 12 April, 12 May, 12 June, 12 July, 17 August, 12 September, 12 October, 12 November, 12 December;
7. Payment of insurance premiums.
8. Assistance with completing and submitting the annual tax return to the Skatteverket - including all tax allowances and expenses.

Swedish company accounting is much more complicated and often requires professional assistance. When setting up a company in Sweden, you need to have start-up capital of between SEK 50,000 and SEK 500,000, depending on the type of company. For companies, you also need to draw up a Stiftelseurkund, or memorandum of incorporation, which includes information such as the start and end date of the financial year, which need not coincide with the calendar year.

Swedish company accounting covers issues such as:

1. assistance with both the completion and submission of the application (form SKV 4620) for the personal identification number personnummer (or samordningsnummer) and the registration of the company with the Companies Register (Bolagsverket), the Tax Agency (Skatteverket), the Social Insurance Agency (Försäkringskassan) and the Migration Authority (Migrationsverket);
2. maintaining the day-to-day accounting, invoicing and registration of all company transactions;
3. assist with registration of the Swedish company as a VAT payer (Mervärdesskatt) and submission of VAT returns by the 12th or, in the case of medium-sized companies, by the 26th of each month. MOMS in Sweden is settled once a month (large companies with an annual turnover of more than SEK 40 million), once every three months (medium-sized companies with an annual turnover of SEK 1 to 4 million), once every three months or once a year (small companies with an annual turnover of less than SEK 1 million). The MOMS percentage rates are: 25% (basic rate), 12% (reduced rate e.g. hotels, handicrafts or foodstuffs) or 6% (low rate e.g. books, passenger transport, newspapers);
4. maintenance of company records;
5. assistance in setting up a company account;
6. payment of both income tax of 28% on the company's profit and employer's tax - Arbetsgivaravgifter - by the 12th of each month. This tax consists of the payroll tax paid to the individual account at Skatteverket (11.62%), as well as the pension contribution (10.21%) and insurance contribution (3.55%);
7. payment of advance income tax (preliminärskatt), calculated by the Skatteverket on the basis of the estimated income stated at the time of company registration and at the beginning of each subsequent tax year, by 17 January, 12 February, 12 March, 12 April, 12 May, 12 June, 12 July, 17 August, 12 September, 12 October, 12 November, 12 December;
8. payment of insurance premiums;
9. assisting with the completion and submission of the annual tax return - INKOMSTDEKLARATION 1 - to the Swedish Tax Agency by 2 May each year, including all allowances and expenses, which the Skatteverket issues and sends between 19 March and 15 April;
10. preparation of the company's annual report.

Swedish company accounting is inevitably linked to documentation, taxes, deadlines and costs concerning both day-to-day transactions and regular monthly, quarterly and annual fees. In Sweden, company costs are divided into fixed and variable costs. Fixed costs include:

• car usage costs and depreciation,
• rental of premises,
• employment of employees,
• internet and company telephone.

In contrast, variable costs include:

• goods and materials,
• office supplies
• equipment and tools,
• advertising,
• travel,
• licences, training.

In addition, costs can also include the company registration itself at the Bolagsverket (SEK 1,400 - cost of registering a sole proprietorship; SEK 700 to 1,700 - cost of registering a company), as well as the start-up capital of SEK 50,000 to SEK 500,000 that must be deposited in an account if a company is established.

The basic costs of Swedish companies also include taxes, such as:

• income tax (national and local),
• VAT,
• excise tax,
• employer's tax,
• CIT tax,
• customs duty
• dividend tax,
• corporate taxes (environmental taxes, corporation tax, stamp duty on mortgages, property tax),
• general wage contribution (allmän löneavgift).

A Swedish entrepreneur is required to submit a tax return - INKOMSTDEKLARATION 1 - to the Skatteverket every year, together with the necessary documents, such as a photocopy of an identity card, E101/A1 (document confirming the place of paid contributions), KU-14 (applicable to persons who have received a pension in Sweden), documents from the employer: KU-10 or KU-13, with a list of income for the previous year, as well as all documents confirming the costs incurred by the company during the tax year that the entrepreneur wishes to deduct from tax. In Sweden, the entrepreneur has 90 days from the date of the tax decision issued by the Skatteverket to make any surcharge. Swedish business owners are also obliged to take care of the safety of their employees and comply with health and safety regulations (Mynak - Work Environment Authority). Accounting in Sweden covers a lot of issues, without knowledge of which your business will not function properly, so it is important to be thoroughly familiar with them before deciding to register your own business so that your enterprise operates legally. You should also think about enlisting the help of a certified accountant, who will take care of all your company's formalities. Remember that knowledge of the laws, rules and statutes governing Swedish accounting is the basis for the success of your Swedish business.

1. What issues does Swedish accounting cover?
   Swedish accounting covers issues such as:
   • payment of taxes and employee contributions,
   • correction of tax settlements,
   • health insurance,
   • consultancy and advisory services,
   • day-to-day accounting,
   • recording of company transactions,
   • filing of annual returns, tax allowances and tax returns,
   • company documentation.


2. What laws regulate Swedish accounting?
   The laws governing Swedish accounting are:
   • årsredovisningslagen (Annual Accounts Act 1995),
   • bokföringslagen (the 1999 Accounting Act).


3. Can I do my company's accounting myself in Sweden?
   Yes, there is no obligation to use certified accountants in Sweden, but it is worth considering, especially for Swedish companies whose accounting is quite complex.


4. What information should an invoice in Sweden contain?
   In Sweden, a correctly issued invoice should contain such details as:
   • company bank account number,
   • date of issue of the invoice,
   • VAT number of the seller and buyer,
   • identification number,
   • payment terms,
   • the terms of delivery of the goods or services,
   • the VAT amount,
   • type of transaction,
   • date of payment,
   • personal data of the seller and the buyer,
   • the price of the good or service,
   • amount to be taxed.


5. How do I choose a reliable accountant in Sweden?
   In Sweden, a reliable accountant can be selected via the Revisorsinspektionen website.


6. When issuing invoices in Sweden, can I use Microsoft Excel?
   No, when issuing invoices in Sweden, you cannot use Microsoft Excel, you must access a secure certified accounting programme.


7. What do the digits in the Swedish chart of accounts mean?
   The first digit indicating the account class - 1 is reserved for assets, 2 for liabilities, 3 for income and 4-8 for expenses. The second account digit indicates the account group, and all four specify a specific accounting account.


8. When is it necessary to register a company as a VAT payer in Sweden?
   In Sweden, a company must be registered as a VAT payer (MOMS) when it is engaged in the sale of goods and services.


9. What taxes apply to a Swedish company?
   A Swedish company is subject to taxes such as:
   • VAT,
   • income tax,
   • excise tax,
   • customs duty,
   • employer's tax,
   • corporate tax,
   • F or FA tax.


10. Why does meticulous bookkeeping for a company in Sweden matter?
    Meticulous company bookkeeping in Sweden is important primarily to avoid unnecessary audits and financial penalties, to keep company records in order and to keep all company transactions transparent, making the company credible and trustworthy. In addition, in Sweden company accounting is also important for:
    • contractors,
    • authorities,
    • investors,
    • banks.