New Laws and Regulations That May Affect You in 2025
At the turn of the year 2024/2025, several new laws and regulations will take effect that may affect you as a business owner. Here is a summary of some of the most important new laws and regulations that the Swedish Parliament has passed, effective January 1, 2025. (Source: Fortnox)
Enhanced Earned Income Tax Credit
The earned income tax credit will be increased at the turn of the year 2024/2025, resulting in a tax cut for everyone earning more than 16,000 kronor per month. The effect diminishes as income reaches 40,000 kronor per month. The average wage earner can expect a tax reduction of about 2,600 kronor per year, which is roughly 200 kronor per month.
For business owners, these changes mean they can keep a larger portion of their income, which can be used to invest in the business or improve their personal finances. Employees will also benefit from the lower tax rate, which can result in a higher take-home pay.
Higher Threshold for State Income Tax
The threshold for state income tax will be raised in 2025 from 49,875 kronor to 52,150 kronor per month (from 598,500 kronor to 625,800 kronor per year).
As a result, fewer people will have to pay state income tax, while those who exceed the tax bracket threshold will have a higher income before state tax is deducted and will therefore have more money in their pockets.
Due to inflation in Sweden, the annual increase in the tax bracket threshold was suspended, and no increase took place between 2023 and 2024. Now, the tax bracket threshold is once again being raised at the usual rate.
Higher Turnover Threshold for VAT Exemption
Effective January 1, 2025, the revenue threshold for VAT exemption will be raised VAT will be raised from 80,000 to 120,000 kronor. For a business to qualify for VAT exemption, its revenue (excluding VAT) must not exceed 120,000 kronor during the current tax year. Furthermore, turnover must not have exceeded 120,000 kronor during the last two tax years.
The increase means that fewer businesses will be required to report VAT. It is also intended to reduce the administrative burden for both small businesses and the Swedish Tax Agency, while at the same time strengthening the competitiveness of the smallest businesses.
Expanded "Växa" Support
The "Växa" subsidy is a financial incentive aimed at sole proprietorships that wish to hire employees. The business may receive a reduction in employer contributions when hiring their first employee. With the Växa Support program, you pay only the old-age pension contribution, which is 10.21%.
Effective January 1, 2025, the “Växa” subsidy will be expanded. Currently, the “Växa” subsidy applies to one employee and the first 25,000 kronor of that employee’s salary. Under the new rules, the subsidy will apply to the first two employees, covering the first 35,000 kronor of their salaries. This will make it easier for employers to create more jobs.
Improved Tax Terms for Sole Proprietors
If you run a sole proprietorship will benefit from improved tax terms starting in 2025. Under the new rules, the threshold for positive interest allocation will be eliminated entirely. In addition, the threshold for negative interest allocation will be raised from a negative capital base of 50,000 kronor to 500,000 kronor.
To make it easier for sole proprietors who prepare simplified annual financial statements , the threshold for when the value of inventory assets must be reported will be raised. Currently, the threshold is 5,000 kronor, but it will be raised to half a price base amount—which in 2025 will correspond to 29,400 kronor. This change will save time for many sole proprietors, who will simply no longer need to report inventory assets that do not exceed this amount.
New SNI codes will be introduced in 2026
New SNI codes will be introduced in 2026. However, starting in 2025, companies will be able to change their own SNI code via verksamt.se. For most companies, this change means they will receive a new code with the same content as today. For some companies, however, the code will be split, meaning that parts of the content will be moved to other codes. SNI 2025 is based on international standards from the National Association of Corrosion Engineers (NACE) in the EU. The codes make it possible to categorize companies according to the type of business they conduct. This facilitates data collection, analysis, and comparisons at both the national and international levels.
The requirement for a hotel license is being eliminated
The elimination of the hotel license requirement is good news for anyone looking to enter the hotel or bed-and-breakfast industry. Starting in 2025, you will no longer need to apply for a license from the police for this type of business. Instead, you’ll simply file a free registration. This will save both time and money and increase the number of people working in the industry.
Retrieved from Fortnox