Taxes in Europe Database v2
Income Tax Act (1999:1229).
50 - 20 years
2.00 – 5.00 %
Depreciation can be made according to straight-line method or declining balance as the taxpayer chooses.
The limits to interest deductions are complex. Sine 1 January 2009 interest limitation rules applies. The rules were tightened as from 1 January 2013.
The main rule limits deductibility of interest expense relating to all loans between related parties. There are exceptions to the main rule. The interest expenses are deductible if the interest income related to the expenses is taxable at a rate of 10% in the hands of the
beneficial owner of the interest income, provided. To determine whether the rate is 10%, the interest income shall be considered on a stand-alone
basis; that is, as if the interest income was the only income recognized
by the beneficial owner A complementary rule to the 10% rule applies with respect to situations in which the recipient is subject to yield tax. In addition to this rule and the 10 % rule, the taxpayer must show that the predominant reason for establishing the debt relationship is not to provide the group with a substantial tax advantage. The “business reasons exemption” provides that interest expense
is deductible if the debt relationship is predominately motivated by business reasons. If the debt relationship relates to an acquisition of shares or share-based instruments from a related company, or to an acquisition of shares or share-based instruments in a company that becomes related after the acquisition, it is also required that the acquisition be motivated predominantly by business reasons. In addition, the beneficial owner of the income must be resident in an EEA state or, under certain circumstances, a state with which Sweden has a tax treaty. The rules also provide that it should be taken into consideration whether the financing could have been made through contributions by direct or indirect shareholders or by the lender. Finally, the rules applies to so-called back-to-back situations.
Profits from a subsidiary are tax exempt regardless of whether the subsidiary is domestic or located abroad, provided the subsidiary falls under the rules of participation exemption. For this to apply the subsidiary must by either an unquoted firm, a quoted firm in which the parent owns at least a 10 % stake, or the ownership in the subsidiary must be a trade related investment.
By annual assessment.
Thnin Capitalization rules: the are no TC rules. However, the Companies Act requires the compulsory liquidation of a company if more than 50% of the share capital is lost without replacement of new capital.