Is a gift taxable in Sweden?
I am a student and resident here in Sweden. Every month I receive some amount directly in my account from a family friends company in US for living and educational expenses. That amount is a gift because one of my family friend is the owner of the company. Is that income taxable?The income varies between 12-15k SEK/month depending on how much I ask for in terms of living/fee/travel expenses as long as it is reasonable. I have a letter from the company stating that the amount is a gift for me and there are no conditions for me to work for the company now or in the future.so two questions:1- Is gift income from a company abroad taxable?2- If bank asks me the purpose of the payment can I show the gift letter? Would that be sufficient?And is it important to tell that one of the owners of the company is a family friend?
Hello, and thank you for contacting Lawline with your question!
My answer will mainly focus on what to think about when receiving a gift from another country. The relevant legislation is Inkomstskattelagen (IL), lagen angående vissa utfästelser av gåva (GåvoL) and skatteförfarandelagen (SFL).
Is a gift taxable in Sweden?
No real gift is a taxable income in Sweden, but it can still be taxable in your friends country. I therefore recommend you to contact your friend regarding the taxation of gifts in the US.
Since 2004 gifts are not taxable in Sweden, this means that real gifts does not constitute taxable income (8 kap. 2 § IL). Therefore, you will not be required to pay income tax for the money that your friend sends you as a gift. However, your friend could be required to pay tax in the US and I therefore recommend your friend to find out that prior to sending you the gift.
However, there are some informal requirements that courts usually demand in order to assess if a value transfer is a gift or not. These requirements are not expressed by law, but through case law. The requirements are:
1. there must have been a transfer of assets/capital,
2. the gift must have been handed over to the recipient of the gift from the gift giver voluntarily and lastly,
3. the gift giver must have a gift intention, mening there can not be any service in return.
If the income that your friend sends you trough his or her company fulfills these three requirements, there should be no taxation for you or your friend (44 kap. 21 § IL). I can say that the first requirement is fulfilled because a transaction has occurred. If the gift was handed over voluntarily and if the gift giver had a gift intention all the requirement would be fulfilled. If you have performed any services to the gift giver the transaction will be seen as your salary and it will be taxable.
Is it legal to receive gifts on a recurring basis?
There is no direct limit to how much money one can receive as a gift and there are no specific formal requirements for the transfer (2 § GåvoL). However, in your case I would highly recommend you make a gift deed (gåvobrev) where it is clearly stated that the amount of money you are receiving is a gift and that you are not doing any service in return.
What control information does Skatteverket want from you?
You have to leave control information if more than 150 000 SEK is transfered to a Swedish bank account from abroad during one year (23 kap. 1 § SFL).
The control information should contain the following:
1. The payments amount in the used currency,
2. The date of payment,
3. The currency code and,
4. Which country the payment comes from.
This is something that your bank should take care of, but I would recommend you to contact your bank and Skatteverket to be sure.
Conclusion and guidance
Gifts are not taxable in Sweden, but I would recommend you to make sure that it is not taxable for your friend in the US. You will therefore not pay tax in Sweden for the gift you are receiving from abroad if the three requirements mentioned above are fulfilled.
There is no legislated limit to the amount/sum of the gifts that one can receive and there is no formal requirements for the transaction of the gift.
You have to leave control information to Skatteverket, the bank usually takes care of this but I recommend you to make sure that Skatteverket gets the information that they need by contacting your bank and Skatteverket.
If you can prove that you are not employed and that you do not perform any services in order to receive the money, I would say that you will not pay tax in Sweden. I recommend you to make a deed of gift with your friend where the purpose of the transaction is clearly stated and who the gift giver and receiver is.
If you would like some help with writing a gift deed, I would highly recommend you to contact our law firm. You can contact the law firm by clicking this link.
I hope that I have answered your question, if not you are more than welcome to ask another question!
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