Archive for the ‘Tax Savings for Sweden’ Category

Double your pension by moving to Malta – Article by Hans Bolander

September 17, 2010

Double your pension by moving to Malta

Free translation by Jakob Kegel.

Article first published in Dagens Industri

Lower taxes in other EU countries offers Swedish emigrants twice as much in pension.

An increasing number of Swedes are moving south to countries such as Malta.  New tax regulation makes it easier to live outside Sweden on a Swedish pension.  “Research suggesting that around 300,000 Swedes are going to move abroad in the next 10 years.  There are several reasons, such as climate, high taxes and a general distrust of the Swedish welfare system” says Göran Andersson, a tax advisor and founder of Taxzero, a consulting firm.

On behalf of Dagensi Industri, Swedens leading business newspaper, Taxzero together with Deloitte, a consulting firm, have calculated the amount of tax savings for a group of four 61 year old couples at different income levels in different countries.

Not only wealthy Swedes can gain from the tax savings, according to the study.  With even a modest pension it is possible to save €10,000 per year in taxes. The savings will obviously increase the larger the pension.

The examples are based on people who are 61 and above since it is only from that age the Swedish state pension can be collected.

The new Swedish rules for capital gains tax when selling immovable property is making it easier for many Swedes to move abroad, since you can transfer the capital gains tax between EU countries.  When you buy a permanent property in another EU country the tax must not be paid in Sweden, but can be withheld and transferred to the new property.

Generalizing which country is the best in terms of tax savings is impossible since the tax laws are complex and distinguish, among other things, between the different pension types and the treatment of capital gains tax.

“A Swedish pensioner will always get a lower tax when moving abroad. That is because Sweden has one of the world’s highest progressive taxes.  The tax in Sweden will be 25% or 0% when a person emigrates”, Göran Andersson is explaining.

One problem when emigrating might be inheritance and wealth taxes since these have recently been abolished in Sweden.  It is however possible to avoid with fairly simple solutions.

A married couple, 61 years old, sell their property in Sweden and buy a new one in Malta.  They keep their holiday home in Sweden.  The couple have had well paid jobs in the private sector and have €1,700 per month in state pension, €3,000 per month in occupational pension and €550 per month in private pension.

Tax benefits:
Lower tax on the pension
No capital gains tax
Relieve from property tax (when selling)
No wealth or inheritance tax
Can benefit from the national health care

Tax if they live in Sweden per year: €€50,000
Tax if they move to Malta per year: €€21,000
Joint tax saving per year: €           €29,000

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