Sweden proposes new system for corporate taxation: a redistribution of tax payments in the business sector
By Erik Björkeson
A Swedish government committee mandated to analyse the Swedish corporate tax system — including the need for a more comprehensive approach to the overall deductibility of interest expenses, as well as the strengthening of the equity capital of companies — has proposed new corporate tax rules.
On 12 June, the committee announced that it is proposing to introduce a new system for corporate taxation. The proposal is a modified comprehensive business income tax (CBIT) model. The model consists of two parts. First, deductions for interest expenditures and other financial costs will be limited by only allowing deductions for financial costs for which there is a corresponding financial income. No other financial costs will be deductible. The assessment will be made on a company group level. Should this proposal go into effect, deductions for net financial costs will be discontinued.
Second, a standard deduction will be introduced for all financing costs — a ‘financing allowance’ — at a rate of 25 per cent of the company’s entire taxable profit. This financing allowance will be allowed whether or not the company has financial costs and, in terms of the financial effects for companies, will be equivalent to reducing the corporate tax rate by 5.5 percentage points (from 22 per cent to 16.5 per cent)…
Click on the link below to read the rest of the DLA Piper briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
The Australian Taxation Office released a draft ruling on the Goods and Services Tax treatment of bitcoin transactions on 20 August 2014.
DLA Piper’s ‘Life sciences: patent extension strategies and antitrust global update’ video covers global antitrust and competition issues including product hopping and reverse payment patents.
Analysis from The Lawyer
Cross-border work and political tensions are dominating this year’s entries for Finance Team of the Year at The Lawyer Awards.
Regulators are ramping up the pressure in the aftermath of recession, leaving firms to compete for compliance and restructuring work