John is an Irish expat living in Estonia since early 2017. He works for Adcash O, and his monthly gross salary is 4,000 . John

John is an Irish expat living in Estonia since early 2017. He works for Adcash OÜ, and his monthly gross salary is 4,000 €. John has let Adcash know that he would very much like to spend the next year working from Stockholm (that is because his girlfriend will be moving to Stockholm for a year for her studies; afterwards they plan to move back to Tallinn). The income tax rate (applicable to John’s salary) in Sweden is 29%. In addition, in Sweden, the employer ordinarily also needs to pay a social tax which amounts to 31.42% of the gross salary. In Estonia the income tax rate is 20%, and in addition to that the employer must pay a social tax of 33% of the gross salary (disregard any pensions’ contributions and unemployment contributions for the purposes of this question).

2.1.   If John were to move to Stockholm and live there for a year, which country would get the payroll taxes on his salary for that period? Does it depend on the type of tax, or an any formalities being complied with? If yes, then how?

2.2.   How large would the employer’s cost (of John’s salary) need to be for John to maintain his net salary at the same level as is his net salary in Estonia?