Spørgsmål: SINK tax and employee pension fee
I understand that a pension fee of 7% of gross earned income, is payable by the employee, but the fee is normally fully tax creditable on the employee’s tax return (i.e. the effective cost for the employee is normally nil). Is this also the case if the employee qualifies for SINK taxation (lives in Denmark but commutes daily to Sweden), or will the employee have to pay the 7% contribution on top of the 25 gross SINK tax?
Svar
For an individual that is a resident of Sweden for tax purposes and therefore pays regular income tax on employment income, the 7% pension fee is dealt with (levied and tax credit is granted) as part of the annual tax assessment, provided that the individual is covered by Swedish social security.
When an individual is a non resident of Sweden for tax purposes and have no income to report in an annual tax return, the individual is not assessed. For that reason, the 7% pension fee is not levied even if the individual is covered by Swedish social security.
Should anyone - still being a non resident of Sweden and covered by Swedish social security - have the possibility to elect to pay regular income tax instead of SINK tax on the employment income, the individual is assessed and the 7% pension fee levied and tax credit granted.
