Do you live and pay tax in Sweden?
Do you want to reduce your taxable income?
Then this article can hopefully help you understand the Swedish Investingsparkskonto (ISK) Account.


What is the Swedish ISK account?

The Swedish Investingsparkskonto (InvestingSparksKonto = Investment Savings Account) account is a flat taxed investment account that was released by the Swedish Government in 2012. The idea was to create a more streamlined approach to managing financial securities, such as shares.

Unlike other traditional share trading accounts, no capital gains are taxed through an ISK account. Instead of capital gains, investors are charged a yearly standardised tax. As a result, the buying or selling of shares does not need to be recorded or reported to the tax authority (Skatteverket).

Who can open an (ISK) Investment Savings Account?

Only individuals (not companies) who have a Swedish personnummer (Social security number) are eligible to open an ISK Account. Ownership is individual, so one cannot have multiple people on the same account. There is no age limit on the account, so it can make a great investment strategy for children.

Most banks throughout Sweden are able to set up an ISK account. Some of these will have their own restrictions on what can be purchased, but generally, they all include funds and shares. For my ISK account, I use AVANZA, which is the largest stockbroker in Sweden. You can see some of my returns here.

The assets within an ISK account can be moved either within (i.e from normal account to ISK account), or between banks. An ISK account cannot be transferred.



Can I move my international shares into an ISK account?

Unfortunately there are

According to Avanza, all financial instruments must be admitted to trading on a regulated market or equivalent marketplace outside the EU / ESS. It is only permitted to trade on marketplaces that Avanza allows at any time.

Avanza have released a pdf document on the trading rules and the marketplaces that they allow. Currently, the marketplaces that are allowed for and ISK account include:

  • Sweden
  • Canada
  • Norway
  • France
  • Belgium
  • Denmark
  • Finland
  • Greece
  • USA
  • Great Brittan
  • Ireland
  • Estonia
  • Lithuania
  • Latvia
  • Spain
  • Netherlands
  • Austria
  • Switzerland
  • Italy
  • Germany
  • Portugal

How is the Standardised ISK Tax calculated?

Tax is calculated annually based on each quarter in the month. At each quarter, the value of the assets, deposits and transfers of securities will be added up and then multiplied by the government loan rate (for the previous year) plus one percentage point. That value will then be taxed at 30%.

It sounds a bit confusing, but let’s break it down.

1. Get the total value of your ISK account

Tax is calculated on the amount in the account at the beginning of each quarter (i.e. January, April, July, October). This amount includes both the invested portion in shares and also the amount of free cash that’s sitting in the ISK account.

2. Determine the Capital base

This is worked out to be one-quarter of the total account value plus all the deposits of the year.

3. Find the Government Loan Rate (the standard income)

First, you must find the Government loan rate for the previous year. The Government Borrowing Rate can be found on the Riksgälden (Swedish National Debt Office) here

Once you have taken the Government loan rate from November of the previous year, you need to add 1 percentage point to determine the standard income. The average for the last 7 years has been 1.47%.

4. Calculate Yearly Tax Rate

The last step is to calculate the above numbers including the standard income rate, then multiply these by 30%.

Now you should have your answer. If it’s still a bit confusing, I have added an example with numbers below.

Swedish ISK Tax Example

Let’s run through an example with real numbers, to help you determine the tax payments on your ISK account.

Let’s say that this is your Account Summary for the Year:

  • In the first quarter, you started with 18,000 kr. You added 1,000 kr, and the value of your portfolio went up 2,000 kr
  • In the second quarter, you now started with a value of 21,000 (18,000 + 1,000 + 2,000). Your portfolio went up in value by 800 kr.
  • In the third quarter, you started with 21,800 (21,000 + 800), added 2,000 and the value of your portfolio went up by 1,200 kr
  • In the final quarter of the year, you started with 25,000 kr (21,800 + 2,000 + 1,200), added 1,000 kr and your portfolio didn’t grow.

This is how the above scenario would look:

QuarterInitial Value (for quarter)Deposits / WithdrawalsChange in ValueTotal (end of quarter)
Jan-01 18,000 kr 1,000 kr 2,000 kr 21,000 kr
Apr-01 21,000 kr 0 kr 800 kr 21,800 kr
Jul-01 21,800 kr 2,000 kr 1,200 kr 25,000 kr
Oct-01 25,000 kr 1,000 kr 0 kr 26,000 kr

Now lets go through the steps mentioned earlier.

1. Get the total value of your ISK account – Tax is calculated on the amount in the account at the beginning of each quarter (i.e. January, April, July, October).

The total value for the ISK account above would be 85,800 kr

Total Value = (18,000 + 21,000 + 21,800 + 25,000) = 85,800 kr

2. Determine the Capital base – This is worked out to be one-quarter of the total account value, plus all the deposits of the year.

All of the deposits of the year = 4,000 kr (1,000 + 0 + 2,000 + 1,000)

  • Capital base = (Total value + Total Deposits) / 4
  • Capital base = (85,800 + 4,000) / 4
  • Capital base = 22,450 kr

3. Find the Government Loan Rate (the standard income) – Find the Government loan rate for the previous year. Add 1 percentage point and then multiply that with the Capital Base to determine the standard income.

If the Government borrowing rate was 0.49% we add 1% on top of that. Now the rate is 1.49%.

Now we can determine the Standard Income.

  • Standard Income = Capital base x 1.49%
  • Standard Income = 22,450 x 1.49%
  • Standard Income = 334.51 kr

4. Calculate Yearly Tax Rate – Calculate taxation on the standard income rate (Final Tax)

  • Flat rate tax = Standard Income x 30% (30% is the tax rate)
  • Flat rate tax = 334.51 kr * 30%
  • Flat rate tax = 100.35 kr

In our example scenario, we would only need to pay 100.35 kr for taxation in that year.

Based on the final value 25,000 kr (average capital for the year), this means that we would only pay 0.40% in taxation.

It also means, that if you sold the whole portfolio for 26,000 (gain of 4,000kr), you would only need to pay 100.35 in tax. This is equivalent to 2.5%.

If this wasn’t in an ISK account (i.e. in a regular trading account), you would have to pay 30% taxation (or 1,200 kr)

Summary

  • Account Value = 26,000
  • Yearly Gain = 4,000
  • If you were using a
    • ISK account, taxation = 100 kr (2.5%)
    • regular trading account, taxation = 1,200 kr (30%)

By using an ISK account, you would save 27.5% in taxation in the scenario above.

Swedish Investingsparkskonto Calculator (ISK-kalkylator)

To make it even easier for you, we have generated a calculator so that you can estimate your own taxes!

Unfortunately my calculator needs to be remade. In the meantime, you can see the calculator provided from Skatteverket:

When Should I open a Swedish ISK account?

It may be beneficial to open an ISK account if you believe that your returns will be higher than the government mortgage rate plus 1% from the year before.

In 2021, the limit is 1.25%.

The average standard income for the last 7 years has been 1.47%. All of the standard incomes for the previous years (according to Skatteverket) are listed below:

Year Standard income
Declaration 2022 (income year 2021) 1.25%
Declaration 2021 (income year 2020) 1.25%
Declaration 2020 (income year 2019) 1.25%
Declaration 2019 (income year 2018) 1.49%
Declaration 2018 (income year 2017) 1.25%
Declaration 2017 (income year 2016) 1.40%
Declaration 2016 (income year 2015) 0.90%
Declaration 2015 (income year 2014) 2.09%
Declaration 2014 (income year 2013) 1.49%
Declaration 2013 (2012 income year) 1.65%

Is a Swedish ISK account right for me?

Generally, you should choose a Swedish ISK account if you can earn a higher return during the year, than the government loan rate for the previous year plus 1 percentage point. All of the returns above this mark are “tax free” compared to using a standard trading account.

An ISK account can also be worthwhile if you do a lot of trading. Not only does it provide you with beneficial taxes on sales, but it also reduces the amount of recording that you need to do of your share trades (none through an ISK). This is a massive saving come tax time.

The benefits of a Swedish ISK account

ISK accounts are very popular in Sweden as they bring a lot of benefits for the investor:

  • No Profit Tax – Investors can buy and sell as much as you want, without having to pay profit tax on sales
  • Lower overall tax (generally less than 1% of the value)
  • No setup costs
  • Easier Tax Returns – Investors that solely use an ISK account don’t have to report any share buys or sells, its all reported to the Swedish Tax Department – Skatteverket
  • Depending on who you create an ISK account with, you may be covered by a deposit guarantee up to 950,000SEK (~100K USD)
  • The taxable standard income on the account can be offset against capital losses and interest expenses you had outside the account
  • Retain the right to attend and vote at shareholder meetings.

The risks of a Swedish ISK account

However, with everything there is risk. ISK accounts are not different. Here are some of the risks or drawbacks:

  • Tax costs regardless of profit or loss – Even if you don’t make money, you will have to pay tax.
  • Unused money in an ISK account will also be taxed.
  • Only limited to shares and funds.
  • Only for private individuals, companies cannot own ISK accounts.
  • Tax can be more complicated for individuals.

The Kapitalförsäkring (KF) Account

For those that want to look into a similar account, but for a business, the Kapitalförsäkring (KF) (translates to capital insurance) account should be investigated. The KF has many features similar to the ISK account, however there are a few key differences. The KF account is an insurance account, where in case of your death, the nominee would receive 1% more than you had invested.

The Differences Between an ISK and KF Account

The Capital Insurance account and the ISK have lots of similar features, both having a flat tax and not having to declare transactions. However, there are a few differences that you should take note of:

  1. In the ISK Account, you own the shares. In the KF account, the insurance company owns the shares.
  2. The voting rights are different between these accounts. The ISK allows you to have voting rights in general meetings, whereas he KF account does not.
  3. You can select a beneficiary on your KF account but not your ISK. If you were to die, the money from the ISK goes to your estate (as per Swedish Inheritance Law), but the KF will go to someone you have selected.
  4. The accounts are covered by different securities in case the platform or bank was to default. The cash in an ISK account is covered by a deposit guarantee and investor protection (~950,000 SEK from the government). The KF Account is covered under a preferential right (unlimited), with the insurance companies being required to keep appropriate debt coverage registers.
  5. A KF account can be better suited to international dividend paying shares. (see below)

Withholding Tax on KF or ISK Account

When you receive a dividend from foreign shares, you will pay withholding tax to the country from which you bought the shares (usually 15%). In the case of a normal trading account, you would pay 30%. 15% would go to the country of origin, and the other 15% would go to the Swedish Tax Agency.

With an ISK account, there is a limitation rule for how much of the foreign withholding tax you can claim back. The account holder cannot get back more withholding tax than the size of the account’s calculated standard income. Additionally with a ISK account, if you have a capital deficit in your tax year, you may not may not make a larger deduction than SEK 500. This results in the tax being at 15%.

With a KF account, the funds are in the insurance companies name. Therefore, it is the insurance company that applies for a deduction for the foreign withholding tax, which means that the holder is normally fully compensated for the withholding tax with a certain delay.

Generally speaking, this would mean tax paid on dividends is equal to 30% on an ordinary share account, 15% on ISK and 0% on KF. Obviously this depends on your own financial situation, and also on the countries that you are investing in.

Summary

The ISK account should be investigated further for those investing in shares and funds through Sweden. As long as you can earn more than ~1.50% per year, it can be more tax-efficient than a standard trading account. If you are receiving a lot of dividends from countries outside of Sweden, then you should also look deeper into a KF account.

Disclosure: I own both a ISK and KF account.

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47 thoughts on “The Swedish Investingsparkskonto (ISK) Account”

  1. can you hold international stocks in your ISK or is this exclusive to Swedish/nordic stocks. If so , are they taxed at the same rate within the isk account

    1. Hi Paul,
      Yep, at least with the Avanza ISK we are able to trade stocks on the platform from USA, Canada, Denmark, Finland, Norway, Germany, Italy, Belgium, Portugal, and the Netherlands. We can also trade others like Australia and UK, but they have to be placed through phone orders.
      They are all taxed at the same rate!
      The only difference is dividends. At least with American shares, these will get taxed in America, then will automatically be offset against your income come tax time.
      I’ll add this information to the article soon!
      Matt

      1. I didn’t quite understand the section about international dividends and taxes for an ISK. In my mind the situation should be similar to the Swedish case i.e., the dividends wouldn’t be taxed at all (except the ISK tax). However, reading you post it seems that I would be double-taxed? Or did you mean, that I would be taxed the typical % of the domicile country (which is typically withheld by default)?

        1. Hi Silver,
          If you receive a dividend from a foreign company, foreign withholding tax will be deducted directly at the time of the dividend. Depending on which taxation agreement Sweden has with different countries, the percentage of foreign withholding tax will vary, but it is usually 15%. You can get an automatic settlement on this, however there are maximums that you are able to claim back depending on your interest expenses vs interest income. IF you have more interest expenses (i.e. a mortgage) than you have interest income (i.e. dividends), then there is a cap of 500 SEK that you can claim back. This is one of the main reasons why investing through foreign dividend companies works best with an endowment insurance account (kapitalförsäkring). In a endowment insurance account, the insurance company is formally the owner of the shares and they can request a deduction for the foreign withholding tax, regardless of how large interest expenses you as a private individual have. It will take a few years, but you should get 100% back.
          Matt

    1. Hi Simon,
      Thanks for stopping by. I did research both Skatteverket and Avanza (both already linked in this article) as I was writing. Is there something specific that you are referring to?
      I would love to make it as accurate as possible.
      Feel free to email me if you prefer.
      Matt

  2. Hi Matt,

    your explanation of ISK is great, I live and work in Sweden and I have been interested in ISK since some time now, but it looks like, when using ISK, you will be forced to use Avanza or Nordnet or similars, and thus, their terrible trading platform Infront (piece of crap..)

    So, is it possible somehow to use a non-swedish broker like Fidelity, Interactive Brokers, etc which have much superior professional trading platforms…and still get the taxation benefits of a swedish ISK account?.

    And if not, what are the best alternatives in your opinion?

    Thanks.
    /Peter

    1. Hi Peter,
      ISK really seems like the most tax advantageous way to invest!
      Unfortunately, I think the main ones are Avanza and Nordnet, then also the banks (Nordea, SEB, Handelsbanken etc.). I did also come across Aktieinvest, which may be worth taking a look into. You could also look at the dutch platform DeGiro. They offer an ISK (https://www.degiro.se/isk/) but they charge 30% withholding tax on capital income from Swedish companies. It seems as though the company needs to reside in Sweden to benefit from the 0% tax on capital income. I assume this would be the same as the other external platforms (Fidelity, IB etc). Here is a list of the groups that are allowing the ISK – https://investeringssparkonto.se/
      Matt

  3. Hi Matt,

    Thanks for your answer. It seems to me like for us here in Sweden we might be forced to use Infront trading platform if we want to benefit from the advantageous ISK account.

    That is what makes me feel uncomfortable, since there are out there much superior professional platforms, in my opinion.

    /Peter.

    1. A workaround could be if you open an account through interactive brokers, use their tools, then make the final trades through a Swedish ISK provider? However, I assume the other platforms would have things highly integrated to be encouraging you to purchase through them. Especially if you want automatic trades based on certain criteria.

      If you are looking at international stocks, you could also look at the Kapitalförsäkring (KF) account, which can be more beneficial for tax.

      I do a lot of my research on international stocks using things like yahoo, finviz, stockrow, and things of that nature. The Swedish accounts are terrible for analyses.

      1. I am looking at international stocks for intraday trading, so keep changing from one platform like IB for example to Swedish ISK at the moment of the trade is not an option, need to be much faster than that, that is why I am so keen about getting a good tool other than Infront.

        But lots of thanks for the tips!

  4. What tool do you use for scanning the markets in Sweden outside trading hours (pre-market, post-market)?, all tools that I can find (tradingview, etc) do not show charts for pre-post market hours for the Swedish market…they seem to do for USA markets though. Maybe you have some suggestions?, free would be great.

    1. Hi John,
      I don’t actually look at any pre/post market data in Sweden, or know if it’s possible?
      Hopefully another reader will be able to reply with some more detailed information. You may also be able to email tradingview, or Avanza/Nordnet to find out more information.
      Matt

  5. Hi,
    I am from India. And do get lot of Dividends from Indian companies. Would ISK or KF help me ?
    With ISK are you allowed to invest in Indian Companies ?
    Also which of the ISK providers does provide all the information in English.
    eg Handelsbanken Site does not give out all the information in English which is available in Swedish.
    Appreciate your inputs.
    Thanks,
    Nilesh

    1. Hi Nilesh,
      Without knowing anything else about your tax situation, I would assume that the KF account would help with most with withholding tax from companies outside of Sweden. This may be helpful – https://blogg.avanza.se/hemberg/2015/09/24/kapitalforsakring-bast-for-utlandska-aktier/ (in Swedish, use Google translate). Potentially send an email to Skatteverket for clarification with your specific case.
      I don’t know how hard it is going to be for you to buy shares in Indian companies from those accounts in Sweden. I suggest you make contact with your bank, or one of the other share providers (such as Avanza / Nordnet etc.)
      to find out more.
      In terms of finding ISK providers who provide information in English, I have had no luck so far. I have only used Avanza and Nordnet. Banks sometimes offer information in English. But from my experience, its only been on a few pages not relating to shares.
      Hope that helps!
      Matt

  6. Hi Matt,

    Thanks for your reply.
    What I understand is :
    1) If I want to buy New International Shares, then from a Taxation point of view it makes more sense to buy them from KF account.
    2) All the Indian shares which I have already bought, prior to coming over to Sweden, if I don’t get them transferred into my KF or ISK account, then the Foreign Withholding Taxation won’t apply. I would have to take care of the Dividend income during my Taxation filling with Swedish and Indian Tax Authorities.

    Thanks,
    Nilesh.

  7. Hi,

    Thank you for the clear example of ISK taxation! I feel like I finally understand it now. It is certainly an interesting investment vehicle, however, I think it really depends on your investment strategy whether it’s the best option for you.

    You say that as long as your portfolio achieves more than ~1.5% returns each year, it can be more tax efficient than a traditional account, but I think this really depends on your investing timeline. If you invest in January, make a 7% gain in the year and sell on New Year’s Eve, then yes you make a significant tax saving by having it in an ISK. However, let’s say you are investing for the long term (as I think most people should), for 10, 20, 30+ years to save for retirement. In this case, you are paying a ~0.5% fee on your entire balance every single year. Taking into consideration the opportunity cost on that portion of the balance compounded over decades, it could end up being a much greater cost than it seems at first. A traditional account yes will incur a 30% capital gains tax when you withdraw, but that is only when you withdraw and only on the gains (plus there are deductions to bring that 30% down for example interest on loans).

    I would be very interested to see if someone has done the raw math to see which of these accounts might be more tax efficient in the long term. I think the ISK is a great option for people who want to shop around, day trade, speculate, etc. People who will buy and sell several times per year. But I’d like to see a calculation for the investor that puts, say, 5,000 SEK into a broad market index fund every month for 5, 10, 20, 30+ years. The broad market on average has returned ~7% year on average, so we could use this as a baseline. Do you know anyone who has done such a comparison? Maybe I will try to crunch the numbers when I get time 🙂

    Cheers,
    Darren

    1. Hi Darren,
      Very interesting comment and I did a very rough calculation to check the result.
      To make things easy to calculate I did not followed the tax calculation for ISK account every season but assume you get an average return rate as the same as the normal fund account, 7% as you pointed out in your comment. Here is some of the results

      Year One Capital 64k Profit 4200 tax for ISK 385 tax for Normal 1260,
      Year Five Capital 370k Porfit 70k tax for ISK 6347 (accumulated for five year) tax for Normal 21k (one time withdraw)
      Year Ten Capital 887k Profit 287k tax for ISK 26k tax for Normal 86k
      Year Twenty Capital 2.6M Profit 1.4M tax for ISK 131k for Normal 429k
      Year Thirty Capital 6M Profit 4.2M tax for ISK 391k for Normal 1.2M
      Year Thirty-five Capital 8.8M Profit 6.8M tax for ISK 621k for Normal 2M
      I put the google excel in the link so you can chnage some paremeter and try out youself.

      BR
      Ran

      1. And here is the link for Google excel
        https://docs.google.com/spreadsheets/d/17sWE-2UWNeeDx7iordwoLEL4P51tCkCRRsqj0d7I4Ao/edit?usp=sharing

  8. Hi Matt,

    Thanks for this informative read.
    I have both ISK and KF accounts as well. I think one additional advantage with KF is that for second half of year taxation is only 50%. This is in addition to the dividends advantage you mentioned.

    I am thinking to operate only KF account going forward. What do you suggest?

    Kind Regards
    Prak

  9. Shardul solapure

    Hi,

    There is also the AF account in Avanza. Not sure how that works for a long term investment like in funds. If I am planning on investing in funds which I will keep for 10 years (example) does using AF make more sense?

    1. Hi Shardul,
      Do you mean the Aktie- och fondkonto?
      If so, this is just your standard taxed share account in Sweden. With this account, you would pay 30% in capital gains when you sell your shares. This could be good if you wanted to sell shares at a loss to offset any capital gains, but, if you think that you will make some decent returns, you may pay less tax through the ISK or KF.
      Check out the other comments here. Ran made a spreadsheet which compared the ISK to the standard tax account. You can play around with the calculations to suit your expected return, and compare the differences in taxes from both accounts.

  10. Hi Matt,
    Many thanks for this. Forgive me for asking if I have missed it, but is there any limit on the amount that can be invested in an ISK?
    Thanks again.
    Jay

    1. Hi Jay,
      I didn’t say it anywhere in the article, and to be honest, I don’t know of anyone that has a ceiling on the amount that you can invest. The platforms present opportunities to open multiple ISK accounts to separate your funds into things like a pension, dividend portfolio, short/long term portfolio. There is no tax difference doing this, and it doesn’t cost any more.
      There is also a deposit guarantee of up to 950,000kr, but this is only for the money not currently invested.
      Matt

  11. Hi Matt,
    Thank you for such a detailed information on ISK account.
    This is Pranay and I am from India. If I invest through ISK account in Indian shares, will there be any withholding tax on capital gain(when I sell the shares)?
    Sorry if I have missed this but what I don’t understand is how the withdrawal from ISK/KF account will be taxed, if I sell shares and want to withdraw money from ISK account?
    Is there any difference tax rates if I do intra day or short term sell?
    Thanks in advance and happy new year!

    Pranay Rathod

    1. Hi Pranay, no worries!
      So any shares that you buy through your ISK are flat taxed each year, and you don’t have to pay capital gains when you sell.
      The problem that you may face is whether you can buy Indian shares through the ISK. According to the Avanza rules (https://www.avanza.se/konton-lan-prislista/konton/isk/fordjupad-information-isk.html#detaljerad-information), you can only trade financial instruments that are on a regulated market or equivalent outside the EU/ESS. Avanza have a pdf which contains each marketplace that can utilise the ISK (Trading Rules for ISK -> https://www.avanza.se/avanzabank/hem/konton/blanketter/isk/Placeringsreglemente_ISK.pdf). Unfortunately it doesn’t look like India is in the list!
      I would email Avanza or your bank to find out what is possible!
      Matt

  12. Hi Matt!

    I was wondering about switching from Avanza to Degiro’s ISK to potentially exploit the benefits of owning more traditional and recognized ETFs, denominated in the US currency (so my returns would not vary based on the SEK to USD conversion rate).
    Do you have any experience with it or know of somebody that does? There is not a lot of info online about it (at least not in English). The only thing that I saw you mentioned is the 30% tax that applies only to investing in the Swedish market? At least that’s how I understood it.

    Thanks for your answer,

    Toni

    1. Hi Toni,
      It sucks that there doesn’t seem to be a good way to invest in some of those Vanguard funds through the Swedish companies!
      I initially looked at Degiro, but never gave it a shot. They are a Dutch company that was not able to obtain the measures to get the 0% withholding tax, and it seems like its a lot of trouble to try and get it sorted out through Skatteverket (Translated from Degiro’s website – To recover the debited withholding tax, the application must contain a form for recovery and a certificate from all financial institutions in the management chain that certifies the debiting of Swedish withholding tax. DEGIRO is not able to produce these documents from the financial institutions required for the recovery, which is why a recovery for the debited withholding tax will most likely not be approved by the Swedish Tax Agency.)
      Under the FAQ on their site they do have a list of countries and the amount of withholding tax they charge (USA was also 30%).
      Sorry I can’t be more of a help!
      Matt

  13. Really Nice article. I was curious to know if it is allowed to have more than one ISK accounts with multiple banks/stock-brokers. Would there be any downside in doing so ?

    1. Hi Abhi
      You are allowed to have multiple ISK accounts either with the same institution/bank, or through multiple banks. Many people use this to take benefits of each of different platforms, or divide up shares based on different goals (i.e. dividend, child savings account, shares, funds, short term, long term etc.).
      Also at least with Avanza, you should be able to easily move shares/funds between ISK accounts (i.e. ISK to ISK) without causing any tax issues. There doesn’t seem to be any clear disadvantages to multiple accounts.
      Matt

  14. Hi Matt, do i understand it correctly that you are an American living in Sweden? If so, can you kindly share how one can find a decent tax accountant in Sweden who can work across both systems?

    Do you know if an American citizen (individual) who invests in foreign ETFs via ISK in Sweden, will the proceeds be taxed as an ordinary income in the U.S.?

    Thank you!

    1. Hi O.M.
      Unfortunately I’m not American, I’m actually originally from Australia! I would suggest you see if there are any Facebook groups that connect the two countries. These can be a great source of information.
      There were some regulations that came through in 2018 that have actually blocked a lot of the banks and financial institutions from offering exchange-traded products such as ETFs and certificates (ETN / ETC) in North America. So you would need to look at some of the German ETFs. A lot of the accounts need to you declare your citizenship, and it seems like it can be difficult if you are American! There is also a bit around, and it seems like you may be taxed in America as well. Hopefully you find an accountant to talk to!
      Matt

    2. I’m also an American living in Sweden and found this page because of the small nightmare that 500kr in an ISK over a few months is causing me. I suggest you contact Phil Winegarner (he may not be taking any new clients though) or Cederwalls in Stockholm (I was referred to them by Phil actually) but Phil advises against investing in mutual funds at all as an American Abroad. The 17kr I made before selling my indexfond shares and closing my ISK are complicating my otherwise very simple US tax return which, btw, I started doing myself last year and saving the thousands of kronor that I’d previously paid to expat tax services. Most other Americans I know here have solved this problem with PFICs and the IRS by having a spouse/partner open the savings/fondrobot account instead.
      [email protected]

  15. Hi,
    Where did you get the information that it is possible to offset losses against an ISK? This cannot be true, and it is directly counter intuitive to the definition of an ISK.
    Mvh,
    Kitt

    1. Hi Kitt,
      Thanks for stopping by and pointing out that line. I wasn’t super clear in what I meant, so I have gone back and updated that text. For some clarity here – The taxable standard income on the account may be set off against capital losses and interest expenses you had outside ISK.
      There is a bit more info here – https://bit.ly/2OhcFl6 (but its in Swedish)!
      Matt

  16. Hello Matt,
    So happy to have come across your blog – it’s really helpful for expats!
    One question – what will happen when I sell all the shares from the ISK account? (Say if I decide to leave Sweden)
    Do I have to pay any extra fees/taxes?

    Many thanks,
    T

    1. Hi T,
      You pay a flat tax on the total each year regardless of if your portfolio goes up or down.
      This means that any capital gains (i.e. if you were to sell everything) do not get taxed when you sell the shares! But, this also means that you can not make tax deductions if you sold securities at a loss.
      Generally places don’t charge a fee for withdrawing out of the ISK, but double check with your broker.
      Matt

  17. Hi,
    Thanks for the sharing. This is useful to the foreigner like me.
    I’m curious about some acts:
    1. If I repeat deposit and withdrawal several time in the same quarter. Do i get serveral extra tax?
    2. If i deposite at the begining of the quarter and withdrawal at the end of the same quarter. Do i get the tax?

    1. Hi Kuo,
      Glad the information is useful!
      I’ll try and answer your questions to the best of my understanding, but you should ask for clarification from the institution that you buy the shares through.
      On Skatteverket’s website, they define the capital base as being made up of all of the assets in the account at the beginning of each quarter plus the sum of all deposits on the account (then divide that number by 4). This means that a withdrawal does not offset a deposit.
      So, based on that, I would say the answers to your questions: (1) Yes, it could be more expensive if you are making multiple deposits and withdrawals several times a quarter, as each deposit will add to your capital base. (2) Yes you would still have a capital base (from your deposits) even if the value of your account is 0 at the beginning of each quarter.
      As I mentioned before, you should confirm this with your institution.
      Matt

  18. Hi Matt,
    I like all that you explained about the ISK account, I live in Sweden and I got interested in ISK recently. But my question is more regarding the brokers that use ISK, they look a bit limited so to say. I have been looking into Avanza and, for example, when it comes to indexes, I am missing some products. Lets say I trade the FTSE100 index, well some platforms, usually offer different products like FTSE100(1€), FTSE100(20€) for different values per point. Well in Avanza, at least with my poor Swedish, I have not even been able to find basic info like, how much SEK/point they use, and if there are different options.
    Can you give me any hint about it? Or maybe I am missing something here or misunderstanding Avanza…to be honest I do not have clear the concept of Avanza, if they are a limited broker? a half-bank half-broker and that is why is so limited?. What could you tell me about it.

    P.D: by the way the Avanza platform sucks, I come from stuff like MT4 or Tradingview and Avanza is way behind.

    Eddie.

    1. Hi Eddie,
      All of the brokers here are poor when you compare with some of the tools you can get through other platforms and countries. I still use platforms such as Charles Schwab to research American stocks (before buying them through the KF account with Avanza). I agree through that Avanza isn’t great when it comes to showing information or doing any of the things that other platforms can do. However, I also don’t think there are many better options here (if you want to utilize the standard taxation accounts). I really think there just isn’t that much competition.
      A couple of years ago the EU brought in legislation which restricted us from buying American funds from Sweden. This means that were unable to buy things like the Vanguard funds. There are some European alternatives (i.e. iShares through Germany), but even then you can’t find the appropriate information from the Avanza platform alone. You have to go into the homepage of the fund to find out whether it is a good fit for you.
      Matt

  19. Hi,
    This article was a valuable find for me, thanks.
    Can you elaborate the following risks of an ISK?
    – Unused money in an ISK account will also be taxed.
    – Tax can be more complicated for individuals.

    1. Hi Omkar,
      As soon as money enters the ISK, it is subject to the standard taxation rules.
      Taxes should be less complicated as you don’t need to fill in any buys, sales or dividends to Skatteverket.
      Matt

  20. Hi Matt,

    I have just moved to Sweden and wanted to check what needs to be done with my previous investments. Back when I was in the UAE, I had invested in a few stocks through IBKR and regularly invested in ETFs through a robo-advisory platform. I am clueless about what needs to be done with it now due to the tax implications. What do you think would be my best approach?

    Thanks
    Abe

    1. Hi Abe,
      Have you tried reaching out to IBKR to change your residency and see what they have to say? I’m not sure how they work if you needed to sign a W-8 or any other types of forms. If so, you would likely have to resign the form with your Swedish tax residency.
      Another possibility would be to email Skatteverket through the contact form on their website. They can also be helpful especially if you keep a paper trail of you interactions.
      Depending on the investments, you may also be able to move them into an account in Sweden. You could possibly reach out to Nordnet or Avanza and see what’s possible.
      There does look to be a double taxation agreement between Sweden and UAE, so you would only likely need to pay taxes in one country
      This is in Swedish, maybe you can find something similar from the UAE: https://www4.skatteverket.se/rattsligvagledning/360977.html?date=2021-01-01
      Hope that helps!
      Matt

  21. Steve Cartine

    As an American residing in Sweden I have been rejected in my attempts to open any kind of investment account at Handelsbanken and Avanza. I have not found any way to save for retirement with Swedish income except to wire it to the US, save it there, and then wire it back, getting burned on transfer and currence exchange spreads each way. If anyone has had a different experience I’d love to hear about it.

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