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Sweden: Withholding tax and "yield tax," foreign life insurance

Sweden: Withholding tax and yield tax

Sweden’s Supreme Administrative Court (Högsta förvaltningsdomstolen) affirmed a tax ruling on withholding tax and ”yield tax” (kupongskatt) or coupon tax in relation to foreign life insurance.


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The Council for Advance Tax Rulings (Skatterättsnämndens) previously examined the Swedish rules concerning withholding tax and ”yield tax” on life insurance policies in relation to EU law. In brief, it was concluded that a foreign life insurance company was not liable for withholding tax on dividends paid with regard to Swedish shares attributable to life insurance policies and for which the policyholders were liable to ”yield tax” in Sweden.

The Supreme Administrative Court effectively upheld this determination. 

KPMG observation

The Supreme Administrative Court´s decision eliminates the "double taxation" suffered by Swedish policyholders as well as the related distortion regarding competition in the Swedish and the European markets. Note 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 decision by the Supreme Administrative Court may also have implications for life insurance companies in countries outside of the EU.


Read a June 2019 report prepared by the KPMG member firm in Sweden

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