Today it is increasingly common for employees at some time during their careers to work abroad for a period of time. These employees carry a considerable risk for double taxation. For alleviation or elimination of international juridical double taxation there are, among others, two rules in Swedish Tax Law to prevent such double taxation. These rules are known as the Six-month-rule and One-year-rule and are stated in the Swedish Income Tax Law. These rules releases tax duty for the foreign income earned during the time abroad for work purposes. However, there are employees who, during their time abroad, choose to live in another country than in the country in which they work. For these employees, the situation regarding their taxation is very unsure. Currently there is great uncertainty of whether the abovementioned rules apply to these employees or not.
Today, there is no statement in law, in the preambles or even in case law that could be of guidance for the abovementioned situation. For guidance when accessing this situation, one has to rely on two positions from the Swedish Tax Agency and one foregone decision from the Swedish Tax Board. The Swedish Tax Board came to the conclusion, unlike the Tax Agency, that these concerned employees could apply, at least the One-year-rule. The foregone decision is now appealed to the Swedish High Court of Administration.
My conclusion is that the Six-month-rule as well as the One-year-rule concerning employees which during their work abroad chooses to live in another country than the country in which they work is a uncertain area of law and these rules are mostly unpredictable.