Sweden tax deduction systems exploited for large-scale fraud

An investigation by the program ‘Uppdrag granskning’ has revealed significant vulnerabilities in Sweden’s ROT and RUT tax deduction systems, which are being exploited for large-scale fraud.

In a controlled test, a reporter successfully applied for ROT deductions for work that was never performed. The application was approved immediately, resulting in a payout of 10,080 SEK without the Swedish Tax Agency (Skatteverket) requesting invoices, customer confirmations, or receipts. The investigation highlighted how a small grocery store in Halland, after changing its business registration, managed to claim nearly 3 million SEK in deductions without performing any actual renovation work.

The systems, which cost nearly 30 billion SEK in tax revenue in 2025, have faced criticism for primarily benefiting high-income earners rather than creating new jobs or formalizing the shadow economy. Critics argue the deductions have instead become a ‘cash machine’ for organized crime, allowing fraudulent companies to exploit public resources by claiming reimbursements for non-existent services.