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Swedish Supreme Administrative Court confirms tax ruling on withholding tax and yield tax

Court ruling about withholding tax and yield tax

Swedish Supreme Administrative Court confirms tax ruling on withholding tax and yield tax in relation to foreign life insurance.

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Nils Schmid

Partner / Head of Financial Services, Tax

KPMG i Sverige

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The Council for Advance Tax Rulings’ has previously assessed the Swedish rules concerning withholding tax and yield tax on life insurance policies in relation to EU law. The Supreme Administrative Court has now unanimously confirmed the Council for Advance Tax Ruling´s decision that a foreign life insurance company (“Y”) is not liable for withholding tax on dividends on Swedish shares attributable to life insurance policies for which the policyholders are liable to yield tax in Sweden, see link to the judgement here.

KPMG Comment

The Supreme Administrative Court´s ruling means that the double taxation suffered by Swedish policyholders and which has led to a distortion of the competition in the Swedish and the European market, is eliminated.

It should be noted that the Supreme Administrative Court, as opposed to the Council for Advance Tax Rulings, found that the current tax treatment constitutes a violation of the free movement of capital. This means that the ruling by the Supreme Administrative Court, as opposed to the ruling by the Council for Advance Tax Rulings, in our view, also has implications for life insurance companies in countries outside of the EU.

Please contact us for further discussion on what opportunities this opens up for.

Nils Schmid
+46 8 723 97 95
nils.schmid@kpmg.se

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