Global

Details

  • Service: Tax, International Tax
  • Type: Regulatory update
  • Date: 6/13/2014

Sweden - Corporate tax reform recommendations for financing activities 

June 13:  The third (and last) report, issued by a committee charged with making recommendations to the Swedish government for corporate tax reform has been presented to the Finance Ministry. The report includes recommendations relating to financing activities of corporate taxpayers.

Background

In January 2011, a committee of inquiry was appointed to consider revisions to the current corporate tax law. The assignment was to be presented in three stages. The committee had previously delivered two interim reports that concerned risk capital and research and development (R&D) measures:


  • Skatteincitament för riskkapital (SOU 2012:13)
  • Skatteincitament för forskning och utveckling (SOU 2012:66)

Third report

The corporate tax reform committee presented its third—Neutral bolagsskatt för ökad effektivitet och stabilitet—that proposes a new system for corporate taxation, in two parts.


  • Deductions for interest expenditure and other financial costs would be limited to only financial costs for which there is corresponding financial income. No other financial costs would be deductible. This proposal therefore means deductions for net financial costs would be discontinued.
  • A standard deduction would be introduced for all financing costs—a “financing allowance”—at a rate of 25% of a company’s entire taxable profit.

In principle, the limitation of deductions would apply to all costs that are interest expenditure in financial terms. A new definition of financial costs for tax purposes would be very similar to the definition of financial costs used in accounting.


In general, the proposal would mean that equity and debt would be taxed equally for the great majority of non-financial companies.


Read a June 2014 report prepared by the KPMG member firm in Sweden: Tax News (June 2014)




©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now