Sweden has proposed expanding the R&D deduction and increasing expert tax relief, including raising the tax-exempt portion of salary for foreign experts from 25% to 30%, with the changes set to take effect on 1 January 2027.
The Swedish Government proposed, on 11 June 2026, additional tax relief for companies with employees engaged in research and development (R&D) activities to boost business investment in R&D, strengthen Sweden’s competitiveness and support economic growth.
Swedish companies make substantial investments in research and development and rank highly compared with companies in other countries. To create further incentives for increased investment, and thereby strengthen growth in the Swedish economy, the Government is proposing changes to the R&D deduction and to the rules governing expert tax relief.
“By improving the tax rules, we are strengthening Sweden’s competitiveness and the innovation capacity of businesses. This contributes to higher growth and more jobs. It is crucial if we are to remain at the forefront in an increasingly competitive international environment,” said Minister for Finance Elisabeth Svantesson.
“Businesses build Sweden. Sweden is the second most innovative country in the world, and with this important reform we will make it easier for companies with profit-generating ideas to continue operating and creating value here at home,” said Cecilia Engström, tax policy spokesperson for the Christian Democrats.
R&D deduction simplified
In the legislative proposal submitted to the Council on Legislation, the Government proposes amendments to the so-called R&D deduction. The deduction allows employers to pay reduced employer contributions for employees engaged in research and development, making it less costly to carry out R&D activities.
“These changes will make the deduction easier to use and more competitive from an international perspective. This will benefit the international researchers and other experts that Sweden greatly needs,” said Minister for Schools, Higher Education and Research Lotta Edholm.
The proposed changes include:
- Expanding the definitions of research and development so that more companies can qualify for the R&D deduction.
- Removing the requirement that an employee must spend at least 15 hours per month on research and development activities; only the requirement that at least 50% of working time be devoted to such activities will remain.
- Allowing the Swedish Tax Agency, when necessary, to obtain opinions from other authorities to better assess whether particular work qualifies as research and development.
More generous expert tax relief
The Government is also proposing more generous rules for expert tax relief. The expert tax regime provides a tax concession for foreign experts working in Sweden. Under the current rules, 25% of salary is exempt from taxation for a specified period. The proposal would increase the tax-exempt portion of salary from 25% to 30%.
The legislative amendments are proposed to enter into force on 1 January 2027.
