Special income tax for foreign residents (SINK) regarding pensions

Limited taxation

If you are subject to limited taxation, your pension is subject to Special income tax for foreign residents (SINK). This consists of a final tax of 25 per cent, and you do not need to file your income in the tax return. The payer deducts your withholding tax prior to dispensing your pension to you.

Although tax is normally calculated from the first SEK, pursuant to Swedish Insurance Act, certain payments are entitled to a earned income allowance. This applies to:

• social insurance pension (except children’s pension)
  
• sickness benefit
  
• activity allowance

This means that the income is taxable insofar as it exceeds the earned income allowance, which in 2024 is SEK 3,677/month (For the 2023 income year, the earned income allowance was SEK 3,369/month). Social insurance pension refers to income-related retirement pension, guarantee pension, survivors’ pension and survivor benefits.

Further information:

• Moving from Sweden

Opt for regular tax instead of Special income tax for foreign residents (SINK)

You can opt to be taxed in accordance with standard tax regulations i.e. pursuant to the Income Tax Act, even if you fulfil the conditions to be eligible for Special income tax for foreign residents (SINK). If you opt to be taxes pursuant to the Income Tax Act this will apply to all of your pension income and any income from employment in Sweden during the year.

If a minimum of 90 per cent of your overall earned income during the year originates from Sweden, you are entitled to personal deductions, such as standard tax allowance.

You are liable for average municipal tax and if you have higher income, national tax. You must then submit your tax return in Sweden.

To choose taxation in accordance with normal tax regulations, you are to use the same service as when you applied for SINK (Application – Special income tax for foreign residents). In such a case, you must indicate that you wish to be taxed pursuant to the Income Tax Act instead of Special income tax for foreign residents (SINK).

You can also retroactively, within five years, request the reversal of the Swedish Tax Agency’s decision on Special income tax for foreign residents (SINK) or taxation pursuant to the Income Tax Act. The tax is then adjust retroactively.