Sweden: Tax measures in budget bill for 2021

Sweden: Tax measures in budget bill for 2021

The budget bill for 2021 proposes a number of changes in the area of taxation and specifically in relation to corporate taxation.

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Among the tax provisions in the budget are the following:

  • Proposals to adjust the current effects relating to deductions for group contribution-blocked deficits and deductions for negative net interest income (proposed to be effective 1 January 2021)
  • Proposals for a new tax for credit institutions, regardless where the taxed credit institution is headquartered; in a government consultation, the tax base would be total liabilities, excluding provisions and untaxed reserves and certain allowable deductions, taxed at a rate of 0.06% and phased up to 0.07% in 2023; the consultation period ends 13 November 2020.
  • Proposals for a temporary tax reduction for investments in machinery and equipment, equal to 3.9% of the acquisition value for such equipment that has been acquired during the period 1 January through 31 December 2021; the tax reduction would be requested in the income tax return for the tax year 2022 and 2023 (if available) and in addition to the ordinary system for depreciation deductions
  • Proposals to reinforce the rules on the reduction of employer contributions for those employees working with research and development (R&D) (proposed to be effective 1 July 2021)
  • Proposals for temporary reduction of employer contributions (payroll reduction) for employees between ages 19 and 23 years
  • Proposals for extension of reduced employer contributions by small companies (such as companies that employ one or two persons)
  • Proposals for upward adjustment of the standard value used for calculating the car benefit
  • Proposals for a change in the rules for tax breaks for foreign experts, researchers and other key people who stay and work temporarily in Sweden, with tax relief applying for five years, instead of the current limit of three years
  • Proposals for reverse charge for value added tax (VAT) regarding mobile phones, integrated circuits, game consoles, tablets, and laptops; this reverse tax liability would apply only when the total tax base for sales of such goods exceeds SEK 100,000 (proposed effective date of 1 April 2021)
  • Proposals for changes to the energy tax measures, to repeal the energy tax imposed on heating fuels in the manufacturing process in industrial activities and in professional agricultural, forestry or aquaculture activities and to allow an extended exemption from energy tax for self-produced electricity (e.g., smaller solar plants)

Read a September 2020 report (Swedish) prepared by the KPMG member firm in Sweden


For more information, contact a KPMG tax professional in Sweden:

Johanna Ahlstedt | +46 70 144 34 55 | johanna.ahlstedt@kpmg.se

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