Key tax factors for efficient cross-border business and investment involving Sweden.
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Generally, limited liability companies are used.
At least SEK 50,000.
A company is resident in Sweden if it is registered with the Swedish Companies Registration Office. Resident companies are taxed on their worldwide income.
Non-resident companies are taxed only on their Swedish source income.
Income tax return has to be filed every year.
The corporate tax rate is 22 percent as from January 1, 2013.
30 percent but exemption/reduction if shares held for business reasons and also exemption/lower rates for EU countries and for treaty countries.
Royalties paid to
Dividends on business-related shares are tax exempt. Unquoted shares are normally considered to be business-related. Quoted shares are normally considered to be business-related if they:
Normally tax exempt in the same manner as dividends. Special rules apply on sale of shell company.
Losses may be carried forward indefinitely. No carry-back is allowed. Losses carried forward may expire or be restricted after a substantial change in ownership of the company’s share capital, at a merger, or on a settlement with creditors.
Consolidated balance sheets are not recognized for tax purposes in Sweden. However, the law allows shifting of income through group contributions. In the case of a qualifying group contribution, the company paying such contribution is entitled to deduct the amount from its taxable income and the recipient company must include such contribution in its taxable income. The requirements for allowable group contributions are:
As of July 1, 2010, a resident company may deduct final losses from its subsidiary resident in another EEA state if certain criteria are met. One criterion that has to be met is that the subsidiary has been liquidated.
Real estate transfer tax is triggered at the transfer of immovable property. The standard rate is 1.5 percent. If the transferee is a legal entity, the rate is 4.25 percent.
Yes, on transfer of immovable property (see above) and mortgage loans.
Controlled Foreign Company taxation rules apply to natural persons or legal entities which, directly or indirectly, own at least 25 percent of the capital or the voting rights in a low taxed foreign legal entity at the end of the financial year.
“Low taxed” is defined as a tax at a rate below 55 percent of the normal Swedish tax rate of 22 percent, i.e., below 12.1 percent. However, a company resident and subject to tax in a “white listed” country is not regarded as a low taxed entity, unless an exemption applies. The rules do not apply if the taxpayer shows that a foreign legal entity resident within the EEA constitutes an actual establishment, e.g., with premises and staff in that country.
OECD Guidelines apply.
Rules on transfer pricing documentation apply.
No (however, as of 1 January 2013, a revised interest deduction limitation regime is effective).
A transaction may be considered an act of avoidance, and therefore disregarded for tax purposes. A transaction is considered an act of avoidance if the following conditions are met:
Moreover, there is an exit rule that states that when an asset or service is taken out of the business it is taxed as if it had been sold at market value.
The standard rate is 25 percent, and the reduced rates are 12 and 6 percent.
KPMG in Sweden
T: + 46 (8)723 9605
KPMG in Sweden
T: +46 (8)723 9467