Hobby or business?
It can be difficult to draw the line between hobby activities and commercial activities (business). It's not just about whether the business brings in money or not - you can make money from your hobby without it being considered a business. How you earn income determines what kind of business you run and how it should be taxed.
What is a hobby?
What distinguishes a hobby is that it is carried out in the hobbyist's free time and that there is no profit motive.
Hobby activities can, for example, be the sale on a small scale of products from handicrafts, gardening, beekeeping, hunting and fishing, breeding dogs, horses and the like, when there is no profit motive.
Various types of cultural work where people who usually have permanent employment and who in their free time engage in activities such as music, painting, photography, theatre or the like are also seen as hobby activities. The income arises without there being any assignment relationship (service), the people are not dependent on the income for their livelihood and no business activity is carried out.
There is no accounting obligation for hobby activities, however, you are required to keep records. This means that you should save notes, bills, receipts and more for the declaration.
Learn more about hobby at the Swedish Tax Agency (in Swedish)
The Swedish Tax Agency's film Hobby or business? (subtitled in English)
Should I register for VAT?
A few hobbyists are considered to be running an economic activity that is subject to VAT. Economic activity means continuously receiving income in the form of compensation for selling goods or services in a way that differs from how a private individual acts.
Register your business for VAT at the Swedish Tax Agency
Work on assignment for someone else – service income (hobby)
If you as a private individual take on short assignments that you do for someone else, it does not count as a hobby.
Services, assignments and gigs at the Swedish Tax Agency (in Swedish)
What is a business?
To be approved for F-tax, you must run or intend to run a business. A business is a gainful activity that is run professionally and independently. That is, an activity that has a profit-making purpose, is run regularly to a certain extent and that is not similar to employment.
What is a business at the Swedish Tax Agency (in Swedish)
If any of the three criteria for a business are not met, the income must instead be taxed as income from services or capital. Sometimes it may be you yourself who needs to report and pay tax on your income.
Income - private at the Swedish Tax Agency (in Swedish)
When should I register a business?
To determine whether the criteria for a business are met, an overall assessment is made of, for example, the nature of the business, its scope, assets, needs for premises, advertising and the practitioner's need for income from the business to support themselves. You cannot choose to classify your business as a hobby or a business.
A business can start as a hobby (income from a job) and grow over time and meet the criteria for a business. The year the business meets the criteria for a business, you need to start a business.
Frequently asked questions about hobby or business
Running your own business alongside your job
It is common to run your own business alongside your employment. You can earn extra income and test your idea without big risks. But remember, taxes, SGI (sickness benefit qualifying income), and pension can be affected.