Global

Details

  • Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/25/2014

Sweden - Status of tax proposals relating to financing activities 

June 25:  Proposals for changes to the tax treatment of corporate financing activities have been considered by the Corporate Taxation Committee (Företagsskattekommitténs) and were summarized in a 12 June 2014 final report that is now being circulated to agencies, organizations, and other stakeholders.

With this final report, the consultation period is set to close 24 October 2014. Following the consultation process, the Ministry of Finance will consider the proposals. Thereafter, the measures will be referred to the Legal Council and then a bill will be issued, which must be approved by Parliament.

Proposals

  • Interest deduction limitation - Under the proposal, deductions for interest expenditure and other financial costs would be limited, by allowing taxpayers deductions for only those financial costs for which there is corresponding financial income. No other financial costs would be deductible.
  • Financing allowance - To replace a repealed deduction for net finance expense, a standard deduction would be introduced—a "financing allowance"—at a flat rate of 25% of the company’s entire taxable profit.

Proposed effective date

The Corporate Taxation Committee proposes that the new rules would be effective beginning 1 January 2016, and would apply for fiscal years beginning after 31 December 2015. Certain exemptions are proposed in transitional provisions in order to prevent tax planning opportunities.


Read a June 2014 report prepared by the KPMG member firm in Sweden: Corporate Taxation Committee's final report on referral


Read a Swedish version of this June 2014 report.




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