Individual Taxation

The ‘Economic Employer’ Model in Practice: Sweden and Germany

First published in Bloomberg Tax, 13 August 2021

The “economic employer” model is, in essence, a replacement for the 183-day rule of thumb that many have used historically to assess a worker’s accountability for taxation when operating in a different country. Pernilla van der Capellen of Skeppsbron Skatt AB and Christian Hick of Flick Gocke Schaumburg explain the model and consider how it operates in Sweden and Germany.

Businesses operating across Europe face a never-ending challenge to navigate the complexities and nuances of in-market tax laws. Over the last 18 months though — due to the impact of Covid-19 on business travel and an increase in remote working — one area of finance that has seen some respite among employers in Europe is the need to assess accurate taxation for workers based in different jurisdictions.

However, with vaccination programs continuing to roll out successfully and an economic rebound anticipated, it is time for business leaders and their CFOs to reassess the practical requirements and updates to Europe’s economic employer tax landscape.

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