The Swedish government's budget bill for 2025

The following is a short summary of some of the fiscal policies and proposals of the Budget Bill, most of which have been presented prior to today in the time leading up to the Budget Bill's presentation. Schjødt's quarterly newsletter, set to be published in early October, will elaborate on some of the proposals, alongside other tax related news of this year's third quarter.

All changes are proposed to enter into force on 1 January 2025, unless otherwise indicated. 

The proposal suggests that savings in an investment savings account (Sw. investeringssparkonto) held by an individual be exempt from yield tax on amounts up to SEK 150,000 in 2025 and SEK 300,000 in 2026. The proposal also includes further amendments to the taxation of investment savings accounts, including adjustments to the stop rule for interest on cash held within them.

The Budget Bill includes a proposal to restrict the right to deduct interest expenses. According to the proposal, deduction will only be allowed for interest relating to loans that meet certain criteria regarding valuation of security provided and the maximum loan-to-value ratio.

Interest may still be deducted on loans secured by residential property, securities (Sw. värdepapper), vehicles, boats, ships, or aircrafts, as well as on loans provided by a pawnshop. Interest may also be deducted if the loan is intended to finance construction or renovation of a building, and the intention is that the loan will be converted into a loan secured by the completed building as a residence property. 

The right to deduct interest expenses will be gradually phased out over two years. This means that for 2025, deduction may be made with 50% of interest expenses on loans that do not meet the new requirements, as described above.  

The portion of a carried forward loss that can be retained after a change of ownership is proposed to be increased from 200% to 300% of the purchase price. It is further proposed to simplify the rules that apply when an individual or certain entities gain direct controlling influence over a loss-making company.

The Budget Bill includes a proposal for enhanced earned income tax credit (Sw. jobbskatteavdrag) and increased deduction for individuals aged 66 and over.

The government proposes that the tax on flights be abolished completely on 1 July 2025.

The salary requirement to qualify for expert tax relief under the so-called "amount rule" is proposed to be lowered. Currently set at two price base amounts per month (SEK 114,600 for 2024), this threshold is proposed to be reduced to one and a half price base amounts (SEK 85,950 for 2024). The purpose is to strengthen businesses' ability to attract and retain international talent, thereby boosting Sweden's competitiveness in the global market. The lower salary requirement is proposed to be applied on work in Sweden starting after 31 December 2024.

The process for claiming tax reduction for installation of green technology is proposed to be streamlined for greater efficiency. Under the proposal, a request for payment must be submitted to the Tax Agency no later than 31 January the year following the tax year in which the installation was fully paid. Further, a claim for tax reduction should be included in the income tax return for the tax year in which the installation was fully paid.

It is proposed to increase certain thresholds related to the taxation of sole traders who prepare simplified annual accounts. Specifically, this concerns the exception for the valuation of inventory assets and the possibility of making depreciation deductions on equipment using the full depreciation base. The proposed changes would raise the thresholds from SEK 5,000 to half of a price base amount (SEK 28,650 for 2024).

An expanded tax reduction is proposed for diesel used in work machinery, ships, and certain boats in professional agricultural, forestry, and aquaculture operations.

The changes are proposed to enter into force on 1 January 2025. However, the older provisions will continue to apply to consumption of diesel that occurs before the new rules enter into force.

The reduction of employer contributions for one-person companies who hire an additional employee is proposed to be expanded to cover up to two employees. Further, the threshold for compensation eligible for the reduction is proposed to be increased to SEK 35,000 per month.

The changes are proposed to enter into force on 1 January 2025 and will apply to compensation paid after 31 December 2024. The expansion of the employer contribution reduction to cover up to two employees is proposed to apply to employment starting after 30 April 2024.