Skatteverket

I received a familiar dark-blue envelope in my Texas mailbox the other day. The nice people at the Swedish tax authorities, Skatteverket, have tracked me down.

Actually, I was at least partially pleased to see the forms, as it proved at least that I correctly sent in my new address. And, reading the documents inside, I was not that upset to see what Sketteverket sent me.

I've posted previously about being a bit uneasy that my tax bill has been zero. Not that I mind, of course, but, knowing the tax regime in Sweden, I know that 'zero' is not a number they use very often. I had a nagging feeling that one day, some unknown bill would come due.

My dark blue envelope contained a förslag småhusenhet fastighetstaxering which is essentially a property tax proposal. It asked me to review their data about our little house and to update it if needed, as changes to the size or fittings of a summer house change its tax value. The homeowner fills out a survey about many elements of the property, and the answers are used to determine the tax base. The form's instructions are available in English on Skatteverket's website for those interested.

The good news for me is that our property and our little house was accurately recorded in Skatteverket's questionnaire. So my concerns about not being on the tax rolls are abated; I obviously did it right the first time. Secondly, since there haven't been any substantive changes to the house, there's no need for me to send anything in. Our new home value will be sent to us in July 2012.

It appears that new home construction has a 5-year tax holiday, so I have a couple more years before I start supporting the social state.

Skatteverket

... is, as you may remember, the Swedish tax authority. My tax forms arrived to my Texas address this week, and once again, my net tax is zero. I like that figure, but I admit I still retain a nagging feeling that I should owe something.

Rutger happened to be visiting and he looked at my papers. He agrees that I have properly registered my house; all the numbers and names match, so I'm not hiding or misrepresenting anything. If the authorities say I don't owe them anything, I'm going to believe them.

Skatteverket has a cool iPhone app to submit your taxes; unfortunately, it doesn't work from the USA as their text number isn't recognized. I had to do it over the internet, but that took about a minute.

There's a wealth of info in English on the Skatteverket website. My favorite is "Purchasing and performing undeclared work in Sweden". These guys are serious about collecting tax on everything.

Registering the land

Last month, Tony brought us a form from the Swedish tax authorities (in Swedish, Skatteverket), showing that he was still owner of the land we bought from him nearly two years ago.

It turns out I had been careful about registering the house with the kommun, but I didn't complete registration of the land sale. Tony and Janne gave us information on how to handle the process; they both made a number of phone calls, and Janne gave me a couple of draft letters to send to the right people.

The first thing was to clear the sale through Värmdö Kommun. The kommun retains right of first refusal on the sale of all land in the archipelago. Usually, they want to keep hold of shoreline and blocks of land for nature preserves, so I wasn't worried about their wanting dibs on my little rock. A couple of weeks ago, I gathered all the documents, wrote a cover letter in Swedish, and sent it all off to Värmdö.

Yesterday I got the good news that all was approved, and I received my land contract with the appropriate seals and other documentation. That allowed me to make the next step, which was to send their OK and another letter off to the Lantmäteriet, the authority in charge of land registrations.

Assuming I've done it all correctly, the land will then be registered in my name and Tony won't be bothered by the tax authorities any longer. Of course, that means I'll be bothered by the people at Skatteverket, but that's for a future post.

Skatteverket

The dark blue envelopes from the nice people at Skatteverket arrived recently. I've written before about my dealings with the Swedish tax authorities. Looking back, I was always concerned that my tax bill was always zero. That is pretty funny; most people would be thrilled with no tax bill!

Last October, I wrote that I expected a bill this year of 5-6000 kronor. I am ironically happy to report that I did indeed receive a bill this time, of 3500 kronor. So I was right about the timing, although the amount was about half.

In subsequent years, though, I think my bill will raise to the amount I was expecting. There is a period of transition from a zero tax rate to the full rate. Even the Swedish tax authorities don't give the full whack on the first year!

The rest was easy. I was able to file my taxes over the phone, through an English-speaking automated phone line. A few clicks online through my Nordea account paid my bill instantly.

If only my dealings with the IRS here in America were as simple (or as cheap!)

The Return of Skatteverket

I received my property tax declaration from the nice people at Skatteverket, the Swedish tax authorities.

Readers of this blog with long memories may remember that I received my last one almost three years ago.

It was quite straightforward; essentially all it asked was if I had made any changes to the property which may have increased its value. Instructions in English were available online.

The list of things impacting the value of a house are wide-ranging. Besides basic things like the size of the house and its construction material, there are others: How close is it to the water? Does it have a basement, a heating system, a garage, a flush toilet, a second floor? How nice is the kitchen?

Actually, the kitchen question was relevant for us this time around. After reading the description, it was clear that our kitchen is now a "normal standard," so I made that change on this declaration.

I did note that adding a värmepump won't change the value of the house for tax purposes. In fact, nothing I would realistically do to our little stuga would move it into a higher tax bracket, thankfully.

Next year should be the first year I will have to pay property taxes on our house. I think my bill should be in the range of 5 to 6 thousand kronor ($600-800). This depends, of course, to no changes to the Swedish tax code in the meantime. So we shall see...

Cashless Sweden

I have found that, over my years in Sweden, every place I go accepts debit cards. I've paid for hot dogs at a kiosk, and my taxi boat through a wireless dongle while on the high seas. I've sent money electronically all over Sweden for all sorts of business and personal reasons.

The New York Times has written recently about Sweden's progress in becoming a cashless society. Old-fashioned physical money represents just 2% of Sweden’s economy, compared with 7.7% in the United States. The Guardian has a similar article, pointing out that robberies have fallen in line with the lack of money available to steal.

Although I haven't seen it yet myself, apparently many ATM machines have been removed due to lack of use, and some bank branches no longer keep cash. It's not just credit cards, too. Camille uses an iPhone app called 'swish' to send and receive small amounts quickly and easily.

It's not just the citizenry that endorses going cashless. Skatteverket, the Swedish tax authority, loves eliminating cash transactions. The high tax rates in Sweden give ample incentive to tax dodge when possible. Paying a workman in cash in an undocumented transaction avoids the payment of VAT, which can be as high as 25%. Of course, Skatteverket does a great job of chasing down such activity.

Despite such work, the shadow economy in Europe is still huge, nearly a half-trillion euros last year. In Bulgaria, 31% of the country's economic activity is off the books. In Sweden it's still over 13%.

As more transactions take place online, more taxes can be collected, which is something the Swedish authorities love!

Weather, etc.

Lots going on this morning, weather-wise.

• The trouble at Heathrow is well documented these past few days. I find it amazing that one of the biggest airports in the world can't clear both runways after one 6-inch snowfall. At the moment, our flight on Thursday evening is still operating, and the forecast the next few days is favorable, so I'm still confident we can make it to Sweden.
• I called Janne just now and he was at our house! He said the bathroom was nice and warm and he was turning on the heat, as it was -10°C. He was also shoveling the deck a bit; he estimated about 70cm of snow there.
• Skatteverket mailed tax forms yesterday, our first full year after registering our property. I'm pleased to report that our tax bill is zero! Hooray!

Happy Tax Freedom Day

...in Sweden, that is. Today, the average citizen finishes paying the government, and can now keep all of their salary for the remainder of the year. (In the UK, it's June 3; the USA, April 30.) Tax revenues are quite important to the Swedish government, as they represent 54% of its GDP; in the UK it's 37%, and the US, 29%.

I've been looking into information on tax rates in Sweden as compared to other countries. There's a wealth of data out there on the interwebs; I've found it surprisingly interesting.

My favourite stat so far is Sweden's total tax burden for a single worker: 48.6%. The US is 30%, and the UK 29.7%. (Belgium is over 55%. Whoa.) On top of that is VAT, which at 25%, is the highest in the world, adding a quarter to the cost of any good (like an incinerating toilet) or a service (like building a bathroom).

Once I receive my response from Skatteverket, I'll try to total up all of the taxes and municipal fees I've paid to build the house. I'm sure it will be a depressingly large figure.

Getting closer!

We're in Sweden this weekend, visiting Margaret and celebrating Marcia and Rutger's birthdays. We will be taking a tour through the USA the next couple of weeks for a few visits before we return "for good" to Sweden on May Day. I still have to settle the shipping of our goods from London, but we expect they'll follow a week or two after.

One thing we wanted to do yesterday was to meet with Skatteverket, the Swedish tax authorities, to apply for extended residency as we are planning to stay the whole summer. I received advice which indicated we could be "secondary residents" of Sweden as long as our house was not our primary residence for the majority of the year. Thankfully, that's exactly the case, so I didn't expect any problems.

The tax office interview wasn't as smooth as I had hoped. The good news is there are no issues with our physically being at out little stuga for 4 or 5 months as we have planned. The bad news is that it looks unlikely we will get our personnummers made active.

As I've written a few years ago, most everything in Swedish society, big and small, hinges on one's number. We can get by without one, but things are a lot more difficult. I am hoping against hope that the authorities will look kindly on us!

Skatteverket

...is the name of the Swedish tax authority. Today, at last, our tax returns arrived in the post. Sooz and I each received a mailing; the house, and our bank account, is 50-50 in both our names.

We were given a little pamphlet in English for "people who live in another country". Reading through the documents, it's clear we have to file a return as we own a property in Sweden. It appears, though, that's all we have to worry about as we have no other income in the country.

All the pre-filled areas on the return show zero, so I just can't hit 'send' on the internet. I'm sure we have to pay taxes on our house in some fashion! From what I can tell, we would owe 6,362kr in municipal tax on a detached dwelling.

I've made a scan and will email the documents to Rutger for his advice. But I won't do it today as it is his birthday and I'll give him the day off. Happy birthday, buddy!

VAT

I haven't yet heard from Skatteverket, but I thought I'd have a look at my papers to see what I've paid already. The easiest thing to total up is VAT; it's shown clearly on every invoice.

Looking at the invoices I've kept (big ticket items like the house and labor, the bathroom, electrical wiring, helicopter, and smaller ticket items like the kitchen, furnishings, appliances, tools, stain, etc.), I've found about 285,000 kronor paid in VAT. Using the exchange rate at the time, that comes to about $45,000 (or £25,000).

Next, I'll add up taxes and fees paid to the kommun. But I need a stiff drink first!

Swedish taxes, part 1

I've been checking Google to see what shows up during a search for "Sweden". No surprises, really: it's cold; the people are blond, and, shall we say, welcoming; IKEA, ABBA, the Nobel prizes and Björn Borg are also high on the list. (I'd add Ann-Margaret but she's probably high on just my list...)

My googling also found that the Swedish health-care model is getting a lot of exposure in the US press these days, which is a good topic for another post, but for now, it leads me to the topic at hand, and something else Sweden is known for: high taxes.

Let's face it, Scandinavia is pretty darned socialist when compared to the US, and even the UK. The level of benefits and services are high, and they're paid for by commensurately high taxes. Here's a little chart of tax rates:

       Corporate  Personal  VAT
Sweden    26.3%   0-57%    25%
England     28%   0-40%    15%
U.S.A.    15-35%   15-35%    0%

I realise this is by no means the whole picture, but in general, it shows that taxes in Sweden are a lot higher than my other two countries. And taxes are much lower today than they were previously. My tax rate when I lived in Stockholm in 1990 was 71%. There's also a story, probably apocryphal, that at the height of ABBA's success, they were asked to pay 106% tax for all earnings over a certain amount. No wonder Benny had to be creative over his business dealings, and Skatteverket is still chasing him even today.

So, based on all this, you would think I'd be fearful of what the tax authorities have in store for me. However, I'm really not, and I'll explain more in a later post, but the key is to remember that we've built a summer home, or fritidshus. In Sweden, that's important.

Skatteverket

Our 2013 taxes arrived last week in the familiar dark blue plastic envelopes, the second of our Swedish mailings here in the USA. The good news is that our tax is still zero; the bad news is that, as best as I can tell, this is the last year they will be so.

New construction has a 5-year tax break, and this year is the fifth since building began.  The next five years should be at a reduced rate, and I believe we'll be charged about 3700 kronor for each of those five years. In 2019, I'll start paying the full rate of around 7000 kr yearly.

Of course, who knows what the tax code will be like by then???