SIMPLIFIED RULES ON PLACE OF WORK AND DECUCTION FOR BUSINESS TRAVEL

The place of work determines whether a journey is a commute or a business trip, and thereby whether the employee may deduct increased living costs and whether the employer may pay allowances free of withholding tax and social security contributions. Under current law, the place of work is where the employee performs the main part of the work. Increased living costs are deductible only for trips with an overnight stay, and once work at the same location has lasted more than three months, less favourable rules apply. Separate deductions exist for temporary work at another location and for dual residence, both subject to a 50-kilometre distance requirement. The government considers the rules unclear and unpredictable in relation to remote work and work at customers’ sites.

Under the proposal, the place of work is determined for each employment or assignment based on the employer's intention at the outset, with a new assessment only if circumstances change permanently. Where work is performed at several places, the place of work is primarily where more than 50% of the work is to be performed, secondarily the employer’s premises if visited daily, and otherwise the employee’s home. Voluntary remote work is disregarded. A statutory definition of business travel is introduced and the three-month rule abolished. Deductions for meals and incidental expenses on business travel are made by standard amounts only, halved after six months. The existing deductions for temporary work at another location and dual residence are replaced by a single deduction for double housing due to work at another location, with the distance requirement raised to 100 kilometres, lodging deductible for at most five years and at most two price base amounts per tax year, and meals deductible for the first month only.

The referral follows the report SOU 2025:4 with three clarifications: the employer’s intention must rest on actual circumstances during a foreseeable period, a lasting change is required for a new assessment, and voluntary remote work does not affect the place of work. For employments ongoing at the entry into force, the employer’s intention at that time governs.

The amendments are set to come into effect on 1 January 2027, applying for the first time to tax years beginning after 31 December 2026. Ongoing deduction periods are counted from the entry into force, and the current 50-kilometre distance requirement continues to apply to homes that qualified for the lodging deduction during 2026. Whether the proposals are included in the Budget Bill for 2027 depends on the budget negotiations and the final outcome of the Swedish general election.