Sweden - Crypto penetration

intro

The issues of taxation and cryptocurrency exchange in Sweden have long been settled. However, an overly strict approach to AML and high taxes hinder the country's crypto business development.

Security level

Sweden has a minor danger security level according to our rating. The jurisdiction has 51.9 points (from 100) for safety level in Numbeo crime rating (1). Homicide level (2) is 1,1 per 100,000 inhabitants a year. Story of firearm-related death (3) 1.31 per 100,000 inhabitants a year.

Crypto Payments

According to the Swedish Financial Supervisory Authority (“SFSA”), there are transactions(4) in Sweden involving virtual assets. However, in Sweden, virtual assets are not considered a standard or well-functioning payment method. There are also established businesses in Sweden dealing with virtual assets mining and businesses that offer trading venues for virtual assets. The SFSA has issued warnings for trading in virtual assets due to the risks identified, e.g. the lack of price and trade transparency and the absence of adequate consumer protection regulation.

As far as we know, non-fungible tokens have yet to be used in any significant scale in Sweden. There have, however, been some high-profile cases where digital artworks, presented as non-fungible tokens, have been auctioned out by public figures.

Crypto Salaries

Being paid in cryptocurrency as a salary from employment or in exchange for services as a freelancer is taxed(5), similar to being paid in SEK or another fiat currency. This means that from a tax perspective, there is no practical difference in what type of currency you receive your compensation – the income amount will be taxed as income in all cases.

Legal

Swedish Financial Supervisory Authority (the “SFSA”) and Riksbank.

Swedish law does not contain(6) a comprehensive regime governing virtual currencies. There are, to a limited extent, specific regulations regarding certain activities relating to virtual currencies that subject custodian wallet providers and virtual currency exchanges to regulatory registration requirements and requirements to comply with the Swedish Anti-Money Laundering Act (the AML Act), but operations relating to virtual currencies are otherwise largely unregulated under Swedish law. Depending on the characteristics of the virtual currencies concerned, it is also possible for them to be included under more general legal frameworks, for example, to the extent that they constitute financial instruments.

As for blockchain technology in general, Sweden has yet to adopt (7) any specific laws to regulate the use of cryptocurrencies or other crypto assets. However, rules of a more general nature may be applicable depending on the use and character of the crypto support at hand.

From a financial regulatory perspective, the SFSA has not provided any conclusive guidance on treating cryptocurrencies or crypto assets for financial regulation. However, the Swedish Central Bank and other central banks have stated that crypto asset is a better term than cryptocurrency since it is mostly purchased as an investment / speculative asset, and the SFSA has indicated that they are of a similar opinion.

As far as we know, only a few ICOs have occurred in Sweden (for example, by Starflow AB and Chromaway AB).

As regards the attitude of relevant authorities, the SFSA and the European Securities and Markets Authority (ESMA) have issued warnings for investing in ICOs and crypto assets in general, highlighting that the purchase of a token in ICOs does not necessarily entail any rights for the consumer, that the price of tokens issued does not have to be set by an independent party and that there is no guaranteed access to secondary markets.

Taxation

Tax name	Index
PIT tax Min	30
PIT tax Max	52
Corporate tax (CIT)	20,6
Min Individual CGT (for crypto)	30
Max Individual CGT (for crypto)	30
Wealth tax Min	0
Wealth tax Max	0
Mining tax	0
TDS tax	0