Sweden: Where cash will never be king

Could Sweden become one of the first cashless societies in the world? Probably, says a researcher at the Royal Institute of Technology. Here's how, and why.

Sweden: Where cash will never be king

Sweden recently got a brand new set of bills, sporting historical Swedish heroes and looking better than ever. There's also a new 200 kronor note, whereas before it leaped from 100 to 500.

But the new wave of cash is a little ironic, given that Sweden is well on the way to abolishing cash entirely. So why come out with more of it now?

“The decision to bring new notes was made five years ago,” says Niklas Arvidsson, professor at the Royal Institute of Technology who researches cashless society.

He says that there were multiple reasons for renewing the currency, including better security and avoiding counterfeit problems. And despite Sweden's long-lasting love affair with digital payments, Arvidsson says it will probably still be another decade before Sweden is entirely cashless.

But it's already quite close. In Sweden only about 20 percent of store transactions involve cash – compared with 60 to 80 percent in most other countries.

Not even many Swedish banks deal much with cash these days. “Cash carries an increased risk of robbery, and administrative costs,” Arvidsson explains. “The banks which do accept cash require that you explain where the cash has come from, to ensure it is not laundered or financing terrorism.”

Read more about the new Swedish bank notes

At this rate, Sweden may become one of the first cashless societies in the world, according to Arvidsson's research. He recently published a paper studying the Swedish electronic payment system Swish – which he says is one of the largest cash-killers.

Sweden was one of the first countries to join the electronic revolution, launching e-bills and payments, electronic bank accounts, and mobile banking.

“Swedish banks are good at joining advanced IT systems early, and in combination with a very strong IT sector, that has led to multiple competitive financial services.”

Swish is the next development, launched in late 2012.

Stockholm in spotlight for financial tech

“Cash is still an important payment method in many countries, but not here in Sweden anymore,” he says. Today there is some 80 billion kronor in cash circulating in Sweden – but in 2009 that number was 106 billion. And it continues to drop quickly. “

And only about half of that is circulating regularly,” he says.  “The rest is sitting at someone's home or somewhere on the black market.” 

In order for a society to truly go cashless, everyone in the society needs to be able to use the new, in this case digital, method. That includes older generations who may not be as familiar with modern technology, as well as those who live on the countryside.

The app Swedish is so simple to use, though, that Arvidsson says it is already conquering the hearts and wallets of cash users.

Another potential challenge of a cashless society faces homeless and paperless migrants: If there is no cash to give, they are (literally) left out in the cold.  But of course there are benefits as well. A digital, cashless society is simpler, more cost-effective, and more open, since transactions are easier to track.

If Swish's popularity continues to grow as quickly as it has, then it could entirely replace cash.

“Swish is like cash in the sense that it is a direct payment which occurs in real-time,” Arvidsson elaborates. “The system's biggest strength is how fast and simple it is.”

Read also: Sweden close to being a cashless society

Currently most Swish transactions are between private users, but stores and online boutiques are starting to try it out. The infrastructure may have to rebuilt to handle the shift to industrial use, but Arvidsson says it probably won't be a problem.

“Swish is already revolutionizing the entire essence of Swedish banking.”

Swish works together with the Swedish bank, Riksbanken, in order to carry out its transactions in real time. And that is a critical aspect of the app's functioning. Without that kind of cooperation it would be impossible – which is why it may be tough to export the Swish model to other nations.

“It's a great idea, but it will take a long time for other countries' bank systems to change from the ground up,” he says.  “But if they figure that out, Swish could lead an international revolution.”


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What to do if you can’t meet Tuesday’s Swedish tax declaration deadline

The deadline to submit your income tax declaration in Sweden falls on Tuesday May 2nd. Here's what to do if you haven't managed to get it together in time.

What to do if you can't meet Tuesday's Swedish tax declaration deadline

When exactly is the Swedish tax deadline and what help can I have to meet it? 

The deadline falls on the stroke of midnight on Tuesday May 2nd, so you still have a few hours to get your declaration together.

Sweden may have relatively high taxes, but the Swedish Tax Agency seeks to make paying them as easy as possible.

If you have any questions, it is well worth ringing the helpline on 0771-567 567.

Unlike the helplines of the tax offices in most other countries, the helpline is well-staffed with informed people who go out of their way to help you. 

The agency also has a good quide in English on how to file your return. 

What happens if you miss the deadline? 

If you fail to submit your declaration by midnight, you are at risk of having to pay a fee of 1,250 kronor, but this won’t necessarily happen. There is an element of discretion, and if you filed your return at 0.15am on May 3rd, you may well be let off. 

In any case, before the charge is taken out of your tax account or skattekonto, you will first receive a note informing you of possible impending late charge, which you can then appeal. 

So if you fell ill on May 2nd, or the internet broke down at your apartment at 11.55pm, you can inform them when you receive this note and you may be able to avoid a fine.  

If in a further three months (August 2nd), you still haven’t submitted your tax declaration, you risk a second 1,250 kronor fine. Finally, after five months (October 2nd), you risk a third fine of 1,250 kronor. 

How to get an extension if you are self-employed 

You can extend the deadline until May 16th by logging into your page on the Tax Agency’s website or calling them on 0771 567 567 (or +46 8 564 851 60 from outside Sweden).

To find the extension form, go to the Mina Sidor page on your Tax Agency account, press the Skatter och Deklarationer link near the bottom, and then press the Anstånd med inkomstdeklarationen link and filling in the form. 

Jan Janowski, a declaration coordinator at the agency, said that the agency prefers for people to do this than to knowingly submit an incomplete or inaccurate declaration. 

“We want people to live their declaration in as complete a form as possible, but if you are still waiting for some supporting documents we would like people to apply for an extension.” 

If you have an accountant, they can apply for all of their clients’ income declarations to be delayed until June 15th in a measure called byråanstånd, intended to help them with the last minute rush to declare.

This, however, has to be done for all of their clients and isn’t something they can do for you just because you are late. 

Is it better to file an incomplete declaration than a late one? 

If you feel unable to file your declaration even on May 16th, what’s holding you back is likely to be something like declaring capital gains tax on share or property sales, or confusion over calculating one of Sweden’s many tax deductions, such as the ROT or RUT deductions for cleaning or home maintenance. 

If you are employed, the most important element of your tax declaration – your income from your job – will already be filled in on the paper or online form.

Declaring your main income from employment is just a question of checking that the details Skatteverket already has are correct and submitting a declaration either using Skatteverket’s app, or by sending a text message including your personal identity number and signature code to 71144 from within Sweden, or by calling 020 567 100 and following the instructions. 

If you are still wading through spreadsheets of share sales, but have no issues with the Tax Agency’s record of your income from employment, you can make the declaration but inform the agency that you may have other capital gains or other income to declare later on. 

If you do this, it’s good to be as transparent as possible with the agency about what information you are waiting for when you make your declaration.

To do this, find the andra information, or “other information” section in the declaration, and write down, in either English or Swedish, what information you are waiting for. 

You could write, for instance: “I sold an apartment in Florida in 2022 but have yet to receive details of the proceeds and am waiting for my accountants in the US to calculate the capital gains.” 

If you do this, you are much less likely to be fined if the Tax Agency later discovers any undeclared gains. 

How long do you have to make changes to your tax declaration? 

Until the Tax Agency makes a tax decision, normally in June, you can resubmit your tax declaration using the same form on the website you used to declare it the first time, and the agency will use the most up-to-date declaration when calculating your taxes. 

Even after it has made a tax decision for an income year, the agency is liberal about any voluntary changes made in future. 

Once a declaration has been made, you can still request changes to the final tax decision based on new information or corrections you have made for up to five years. 

For the first 12 months after the end of the taxation year (IE, until January 2024), the tax agency will never levy a so-called tax surcharge (skattetilläg), even if one of its officers discovers that someone has failed to declare, or falsely declared, some earnings or income in your return. 

After the first 12 months, if you bring undeclared income or falsely claimed tax breaks voluntarily to the tax agency’s attention before the agency discovers it, you are also likely to avoid a surcharge. 

What happens if the agency catches you not declaring income or falsely claiming rebates? 

If you are caught evading taxes or make a mistake, the penalty is set quite high. You have to pay the tax you should have paid, plus a 40 percent surcharge.