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Sweden: Interest limitation rules expected for corporate sector

Sweden: Interest limitation rules expected

The “Spring tax bill” (Vårpropositionen) was presented on 16 April 2018. Typically, the Spring tax bill includes announcements of tax proposals to be presented by the government in the forthcoming budget bill. This version of the Spring tax bill is the last one of the current government, and there were no significant tax proposals announced for the Spring tax bill.

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Two measures announced in the tax bill were proposals for increased funding for the Swedish tax agency to allow for certain unannounced inspections and special rules that would allow for the deferral of capital gains realized on sales of private residences in instances of “social displacement.”

Interest limitation rules

At present, a question being asked is how the government intends to proceed with a proposal for new interest limitation rules for the corporate sector. The government has expressed an interest in addressing the use of interest deductions in tax planning—that is, it would seek greater neutrality between the tax treatment when a corporation uses its own funds and when it uses borrowed capital. The effective date for such a proposal was changed from 1 July 2018 to 1 January 2019, and now the measure has been postponed. 

Assuming the proposals are advanced by the government, there are expectations that the measures could be subject to votes in the Riksdag in June 2018.

 

Read an April 2018 report (Swedish) prepared by the KPMG member firm in Sweden

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