New rules proposed to make place of employment easier to determine

The Government has proposed clearer rules for determining where employees and contractors have their place of employment (tjänsteställe).

Swedish version here

The Swedish Government has presented a legislative proposal containing measures intended to make the rules for determining the place of employment clearer and more predictable. The background is that the current rules are perceived as difficult to interpret, particularly for individuals who work at several locations or have a mobile working pattern. The complexity is also contributing to incorrect tax deductions and makes it difficult for employers and employees to predict the tax consequences of how their work is organised.

The determination of the place of employment has significant practical implications. Among other things, it determines whether a travel is to be treated as an ordinary commute between home and work (arbetsresa) or as a business trip (tjänsteresa). This, in turn, affects the availability of tax deductions and the tax treatment of per diem allowances (traktamente), travel reimbursements and other expense reimbursements.

Place of employment to be based on the employer’s intention

The most significant change is that the place of employment is to be determined based on the employer’s or principal’s intention regarding how and where the work is to be carried out.

The assessment is to be made when the employment or assignment begins. The intention must be forward-looking, based on actual circumstances, and cover the period that can reasonably be foreseen. No general assessment period, such as two years, is proposed.

If the working pattern subsequently changes on a permanent basis, a new assessment must be made. Temporary deviations from the original plan, however, should normally not affect the place of employment. A separate place of employment is to be determined for each employment and each assignment.

Work performed at one location or several locations

Where work is to be performed at a single workplace, that location will normally constitute the place of employment.

For individuals who work at multiple locations or while travelling between locations, the following order of assessment is proposed:

1. The location where more than 50% of working time is expected to be spent will be the place of employment.
2. If no single location accounts for more than 50%, the employer’s or principal’s premises will constitute the place of employment, provided that the premises are expected to be visited for work purposes on approximately 80% of working days, corresponding to four out of five working days.
3. If a place of employment cannot be established on a lasting basis under these rules, the individual’s home will constitute the place of employment.

The allocation of working time is to be determined based on hours worked.

Remote work

The proposal distinguishes between remote work that an employee is required to perform and remote work that the employee may choose to perform.

Where work, under an agreement, is to be performed wholly or partly remotely, this must be taken into account when determining the place of employment. However, where an employee may choose to work from home on certain days, such voluntary remote work should generally not affect the assessment.

New standard amounts for business trips

Deductions for meals and incidental expenses during business trips may only be claimed in accordance with a standard amount (schablon). The possibility of claiming deductions for the actual increase in expenses will therefore be removed.

During the first six months of a business trip, deductions may be claimed at:

• 100% of the domestic amount or foreign amount for a full day
• 50% for a half day

After six months, deductions may be claimed at:

• 50% for a full day
• 25% for a half day

The same levels will apply regardless of whether the employer has paid a per diem allowance or not.

At the same time, the concepts of maximum amount and normal amount are proposed to be replaced by domestic amount and foreign amount, respectively.

A single deduction for dual housing due to work in another location

The current deductions for temporary work in another location (tillfälligt arbete på annan ort) and dual residence (dubbel bosättning) are proposed to be replaced by a single deduction for dual housing due to work in another location.

Eligibility for the deduction will require, among other things, that:

• the individual stays overnight in the work location,
• the distance between the original or current home and the workplace exceeds 100 kilometres,
• neither residence is the individual’s parental household, and
• the dual housing arrangement has arisen because of the work and results in an actual additional cost.

The dual housing must have arisen because of the work. Consequently, no deduction will be available if the accommodation at the work location was acquired for private purposes, such as a holiday home or leisure property, even if the individual subsequently begins working in that location.

Additional housing costs are primarily to be deductible based on the actual additional expense incurred. Where the cost cannot be substantiated, a standard deduction of 50% of the domestic amount or foreign amount per night is proposed. The deduction may be claimed for a maximum of five years and will be capped at two price base amounts (prisbasbelopp) per tax year.

For meals and incidental expenses, deductions will be granted only for the first month and will amount to 50% of the domestic amount or foreign standard amount for each full day.

Entry into force and transitional provisions

The changes are proposed to enter into force on 1 January 2027 and apply for the first time to tax years beginning after 31 December 2026.

For ongoing employments and assignments, the assessment of the place of employment is to be based on the employer’s or principal’s intention at the time the new rules enter into force. Special transitional provisions are also proposed for ongoing business trips and existing situations involving dual housing.

Where the conditions for deduction for dual residence have been met for a residence at any point during 2026, the current distance requirement of more than 50 kilometres will continue to apply, rather than the proposed new threshold of more than 100 kilometres.

Finally, it should also be noted that the continued legislative process is dependent on the finalisation of the Budget Bill for 2027.

Comments

The proposal includes both clarifications of principles that are already applied in practice and substantive changes to the rules governing place of employment, business trips and dual residence. The sharper focus on the employer’s intention and the introduction of new thresholds should increase predictability.

At the same time, new issues may arise where working patterns gradually change, where work is performed for multiple clients, or where activities are carried out in several countries. It will therefore be important to document the actual circumstances underlying the assessment of the place of employment.

Employers and principals should therefore:

• reassess the place of employment for ongoing employments and engagements,
• document where and how work is intended to be carried out,
• review remote work agreements, travel policies and per diem allowance policies,
• identify individuals who work at multiple locations or regularly on client sites, and
• adapt payroll processes and reporting of expense reimbursements.

The Government estimates that approximately 150 000 employees and contractors could have their place of employment reclassified. More individuals may have their home constitute their place of employment, which could result in a greater number of travels being treated as business trips. Employers should therefore already begin assessing how the proposals may affect internal policies, employment terms and procedures for travel and expense reimbursement.

Authors

• Sevim Güven, Partner, People Advisory Services, +46 72 230 95 20
• Eva Ahlin, Director, People Advisory Services, +46 73-055 87 11