Adjustments to the new tax rules for the corporate sector

The 1st of January 2019 new EBITDA interest deduction tax rules were implemented for the corporate sector. The new tax rules have led to situations where the limitation has effectively partially reduced historical tax losses for companies expanding. In order to correct this, the government proposes that corporations that wholly or partially cannot deduct the yearly interest costs, because of the limit, will in some cases be able to adjust their deductions for previous years in relation to the denied interest deductions.

Tax reduction for investments

The proposal represents a temporary tax reduction on investments in inventory. The reduction, which means that a lower income tax is paid, is proposed to be up to 3,9% of the acquisition value of the inventory. The tax reduction will apply to inventory purchased during 2021.

Reduced general payroll tax for 19–23-year-olds.

The government proposes a temporary reduction of 37% of the payroll tax for 19–23-year-olds from the 1st of April 2021 to the 31st of March 2023. The purpose for the reduction is to off-set the negative effects of the pandemic on youth employment and to stimulate the hiring of new employees.

The expert tax on foreigners becomes more competitive.

Foreign experts, researchers, and key people can currently get a tax reduction for at most the first three years of their limited visit to Sweden. The government proposes to extend this reduction to the first five years. The proposed change would be implemented for those who began their stay after the 31st of May 2020.

Enhanced FoU-deduction

The FoU-deduction means that companies that employ people working in the research and development fields pay a reduced payroll tax and a lower general payroll fee. By enhancing this deduction, the government intends to improve the opportunities for companies to conduct research and development in Sweden.

The proposal means that the qualifying time worked on research and development is reduced per employee to at least half of the calendar month and simultaneously the maximum reductions is increased from SEK 450 000 to SEK 600 000 per month.

Comments

Generally the proposals are favorable for many Swedish companies and most welcome.

Contact us for further details how this may be applicable to your operations in Sweden.

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