Sweden: Dividends paid to non-resident pension funds | KPMG | GLOBAL

Sweden: Withholding tax, dividends paid to non-resident pension funds

Sweden: Dividends paid to non-resident pension funds

The Advocate General of the Court of Justice of the European Union (CJEU) in September 2015 issued an opinion in a case concerning Swedish withholding tax imposed on dividends paid by a Swedish resident company to a non-resident pension fund (in light of the different treatment provided when dividends are paid to a resident pension fund). The CJEU Advocate General concluded that EU law does not preclude the Swedish withholding tax treatment on dividends paid to a non-resident pension fund.


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The case is: Pensioenfonds Metaal en Techniek v. Skatteverket

Swedish withholding tax

Concerning payments of dividends to Swedish resident pension funds, a notional yield is calculated on the net assets of the pension fund, and the deemed yield is taxed at 15%. A Dutch resident pension fund, by contrast, is taxed at a flat rate of 15% of the gross dividend. 

The aim of the Swedish tax provisions is to provide that the yield tax levied on resident pension funds is “neutral” from the with respect to the form of investment and relative to economic conditions.

The Advocate General concluded that the situation of resident pension funds in Sweden is not comparable to that of non-resident pension funds.

KPMG observation

The Advocate General’s Opinion is not binding on the CJEU; rather, it is the role of the Advocates General to propose a legal solution to the case. With this opinion, the judges begin their deliberations in this case, with a judgment to be given at a later date.


Read a September 2015 report prepared by the KPMG's EU Tax Centre: AG opinion in the Pensioenfonds Metaal en Techniek v Skatteverket case

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