Council for Advance Tax Rulings criticized for decision regarding digital nomad
The Council for Advance Tax Rulings (SRN) has come into focus following a high-profile decision regarding a so-called digital nomad. The council provided the individual with an advance ruling stating that they would not be considered fully liable for tax in Sweden, despite the person working remotely from abroad. It has now emerged that the decision was incorrect according to the Supreme Administrative Court.
The case concerns the boundary for when a person is considered to have a significant connection to Sweden. The digital nomad worked for a Swedish company but was located abroad. The Council for Advance Tax Rulings deemed that the person had severed ties with Sweden sufficiently to avoid paying full tax here, but the authority made an incorrect assessment of the circumstances.
The Supreme Administrative Court has now overturned the decision. The court maintains that the digital nomad still has a sufficiently strong connection to Sweden to be liable for tax here. This means that the individual must pay tax in Sweden on their income, even though the work was performed remotely from another country.
The decision is important because it provides guidance on how Swedish tax rules should be interpreted at a time when more and more people are working digitally across national borders. It shows that it is not enough to be physically located abroad to automatically avoid Swedish tax. One must also demonstrate that most economic and social ties to Sweden have been severed.
For many who plan to work as digital nomads, the ruling serves as a reminder that tax rules are complex. It is important to carefully examine what applies to one's own situation before moving abroad, in order to avoid unexpected tax claims after the fact.