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I am an Australian citizen working in both Sweden and Australia. I have been in Sweden for just over 3 years, my partner is Swedish. I travel to Australia regularly, at least twice a year, where I also work. The majority of the time I am in Sweden, although my income in Australia is roughly similar to that in Sweden due to better pay. I have the rest of my family in Australia, and all my assets in the form of shares, managed funds etc are in Australia. Up until now I have declared my Swedish income in Australia for calculating my tax return, which has seemed far easier than doing the reverse, since my financial affairs are more complex in Australia. My Swedish based income and tax have then been used in the calculation of my Australian tax return. I still have my medicare card and pay full premiums for Australian private health insurance. I am in all probability going to be spending at least the next 5 - 10 years predominantly in Sweden due to starting a family, although I plan to return to Australia on a very regular basis and continue working there also. How should I proceed with tax in the coming years? Will I need to start declaring all Australian sourced income in Sweden?

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2 Answers 2

This is a complicated scenario and my recommendation would be to seek professional tax advice.

The concerning thing from your question is that you say you have declared your Swedish and Australian income in Australia (but presumably not in Sweden?) as it makes the calculations simpler.

I'm afraid it doesn't work that way. You don't get to choose which taxes you declare where. The governments of Sweden and Australia each have their own rules to determine whether you are a resident of that country for tax purposes. This will be based on the number of days you spent in each country during the tax year. As crazy as it might sound, it is perfectly possible to be a resident of more than one country in the same tax year if you spend a lot of time in both countries.

Victor is not correct in his statement about citizenship. If Sweden deems you to be a resident you must file and pay taxes on your global income to Sweden and this will include your Australian income. The tax treaty between Australia and Sweden may help reduce your liability as Victor states, but you should not assume that no tax is owed to Sweden.

This page would suggest that residency rules in Sweden are unfortunately quite ambiguous http://www.gti.org/Services/Tax-services/Expatriate-tax/Expatriate-tax-ebook/Sweden/basis-of-taxation.asp

Even if you were acting in good faith and did not understand the details, the consequences for tax avoidance can be anything up to and including criminal charges, which is why I must suggest you seek advice or at least look into the residency and tax rules of Sweden yourself.

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Being an Australian citizen you should not have to pay tax in Sweden on income earned in Australia, however, you should confirm this with both the Australian Government (ATO) and the Swedish Government.

Relating to your income earned in Sweden, you need to declare that income in your Australian Income Tax Return and if you paid tax on that income in Sweden, then you can claim an Australian foreign income tax offset, which provides relief from paying double taxation.

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You can find more details about "Double Tax Avoidance Agreement" here: en.wikipedia.org/wiki/Tax_treaty –  0x2bad 0xdeadbeef Oct 11 '12 at 11:28

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