Market overview

In April 2017, new TP documentation standards came into effect in Sweden. These new measures bring the existing tax regime in line with OECD recommendations, specifically the automatic exchange of country-by-country reporting (CbCR), and master file and local file requirements. Parliament approved the legislation in March based on drafts submitted by the Swedish tax authorities last year.

Many Swedish taxpayers have been reviewing their structures since BEPS first appeared on the horizon. Hence Swedish law firms and tax advisers are well-prepared for the impact on demand for TP services. So far there has been an increase in demand for restructuring and valuation.

Naturally, the new TP measures have caused a spike in companies looking for compliance services. An increase in auditing was another reverberation of the new guidelines. This will likely mean more litigation in the future. These trends look set to continue as Sweden tweaks its legislation to fall in line with the BEPS project.

"We're awaiting a new wave of audits based on new OECD guidelines," said Pär Magnus Wiséen, head of TP operations at PwC. "Even though the new rules are only clarifications, and the new audits will probably be based on these clarifications, we have begun to see the STA raise these arguments in audits and on-going litigations about a year ago."

Although in many ways Sweden is compliant with OECD guidelines, the new TP rules extend documentation standards to companies which were previously exempt. This includes foreign companies with a permanent presence in Sweden, as well as Swedish businesses with establishments abroad. The rules apply to Swedish unlimited partnerships in cases where transactions with a foreign enterprise are taxed in Sweden.

The new TP rules are effective as of the financial year from April 1 2017 and the CbC reports are due at the end of 2017. Multinational corporations with more than SEK 7 billion ($863 million) in revenue every year are obliged to provide data on every jurisdiction in which they operate. There are exemptions for companies with less than 250 employees and assets under SEK 400 million or revenue less than SEK 450 million.

These changes have required Swedish taxpayers to update their TP policies. Much like in other jurisdictions, the tax authorities are taking an aggressive approach and the structures and substance of companies are a major focus. This can only mean more work for TP professionals.

Tax authorities

Ministry of Finance
Rosenbad 4
SE-103 33 Stockholm
Tel: +46 8 405 10 00
Fax: +46 8 21 73 86
Website: www.sweden.gov.se/sb/d/2062

Swedish Tax Agency
Postal address: 171 94 Solna
Visiting address: Solna strandväg 22
Tel: 0771-567 567 (in Sweden); +46 8 564 851 60 (abroad)
Email: huvudkontoret@skatteverket.se
Website: www.skatteverket.se

Tax rates at a glance

(As of July 2017)

Corporate income tax 22%
Capital gains 22%
Branch tax 22%
Withholding tax (a)
Dividends 0/30%
Interest 0%
Royalties from patents and licences 0/22%
Branch remittance tax
Net operating losses (years)
Carryback 0
Carryforwards indefinitely

  1. Payments to European companies that qualify under EU directives may be exempt or subject to reduced withholding tax rate.

Source: Skeppsbron Skatt, Taxand Sweden

Firm contact details

Skeppsbron Skatt, Taxand Sweden
Svalner Skatt & Transaktion