Sweden proposes major Corporate income tax Changes
On 21 March 2018, the Swedish Government submitted a draft bill regarding important changes in the corporate taxation area to the Council on Legislation for their consideration.
The main proposals are:
- A general provision limiting the deductibility of net interest expense to 30% of earnings before interest, tax, depreciation and amortization (EBITDA)
- Reduction of the corporate income tax in two phases, from 22% to 20.6%
- Limitation of interest deductibility in certain cross-border transactions (anti-hybrid provisions)
- Retention of the current interest deduction limitation rules on intercompany debt, however, with a narrower scope
- Introduction of tax rules regarding financial leasing
- Introduction of accelerated depreciation on tenement buildings
- Increased standardized income on tax allocation reserves
- Introduction of standardized income on contingency reserves for non-life insurance companies
The new rules are proposed to come into effect 1 January 2019.
