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Expanded tax incentives for R&D and foreign experts

Photographic portrait of Andreas Bråthe
Andreas Bråthe

Tax Technology and Transformation Lead and Partner, Tax, EY Sweden

22 Jun 2026
Related topics
Tax

Sweden is strengthening the tax incentive for R&D, as well as the rules on tax relief for foreign experts and foreign key expertise.

Swedish version here

On 11 June 2026, the Swedish Government submitted a draft bill to the Council on Legislation proposing significant changes to two key tax incentives: the research and development (R&D) tax deduction and the tax relief for foreign experts. The legislative amendments are proposed to come into force on 1 January 2027.

The R&D tax deduction – simpler and broader application

The rules governing the R&D tax deduction have long been criticized for being difficult to apply for both employers and the Swedish Tax Agency, and the government therefore believes that the regulations should be amended so that more companies are incentivized to increase their research and development activities.

The most significant changes concern the definitions of research and development. Research is to be defined as work aimed at generating new knowledge for commercial purposes, whilst development is to be defined as work aimed at creating or improving goods, services or production processes for commercial purposes through new solutions to scientific or technical problems. By removing the requirements that the work must be systematic and qualified, the scope for what is covered is wider. In practice, this means that a larger proportion of companies’ R&D work may qualify for the tax relief, and small and medium-sized enterprises in particular can therefore be expected to have greater access to the relief.

The condition that a person must have worked at least 15 hours per month on research or development is to be abolished. However, the requirement that a person must spend at least half of their actual working hours on R&D during a calendar month remains; but as 15 hours per calendar month does not, as a rule, correspond to half of a person’s working hours, it is considered reasonable to abolish the hourly requirement.

To strengthen legal certainty and consistency in application, it is also proposed that the Swedish Tax Agency should, where necessary, seek an opinion from another authority on matters concerning what constitutes research or development. This may contribute to a more informed assessment in technically complex cases, but also means that the processing procedure may, in some cases, become more extensive.

How EY can help

The expert tax – more generous and accessible

It is also proposed that the rules on the expert tax undergo several structural changes.

 

The tax-free portion of the salary is being increased from 25 to 30 per cent, which represents a direct enhancement of the tax relief. At the same time, the regulations are being made more flexible by defining the maximum application period of seven years as 84 calendar months, which can be spread across several periods of residence in Sweden, thereby providing a more flexible and fair calculation.

 

The skills rule is being significantly simplified. The requirement that there must be significant difficulties in recruiting a comparable person in Sweden is to be abolished. This is expected to make the rules more predictable and useful as a recruitment tool.

 

Tax relief for experts is to be granted even when the employee is a Swedish citizen. The requirement that there must be an intention to reside in Sweden for a maximum of seven years is removed. The residence requirement is extended from five to seven calendar years, meaning that the employee must not have been resident or permanently resident in Sweden during the seven calendar years immediately preceding the start of employment.

 

The amount rule is being changed from the price base amount to the income base amount. The level of relief is to be set at one income base amount, which means that the level will follow wage trends in society rather than price trends.

 

Finally, the application deadline for the Research Tax Board is being extended. The deadline for applying for expert tax relief is to be extended to six months, compared with the current three months.

 

Overall assessment

The proposals will result in a more accessible and practical regulatory framework. For the R&D tax credit, the focus is on broadening its scope and reducing room for interpretation, whilst the changes to the expert tax are primarily aimed at increasing flexibility and reducing administrative complexity.

 

Overall, the measures are expected to improve the conditions for companies to conduct and locate their operations in Sweden, not least by facilitating investment in research and development and the recruitment of international talent. This will also strengthen Sweden’s international competitiveness as a location for business and research.

 

Authors

  • Andreas Bråthe, Partner, People Advisory Services – +46 73 397 24 33
  • Latifa Pham, Manager, People Advisory Services – +46 70 823 29 85

Summary

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About this article

Photographic portrait of Andreas Bråthe
Andreas Bråthe
Tax Technology and Transformation Lead and Partner, Tax, EY Sweden
Tax lawyer and certified tax advisor. Leader in the global mobility field and within Tax Technology and Transformation.
Related topics
Tax

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