Sweden: Revised proposal for a bank tax

The government will proceed with its proposal for a risk tax to apply regarding certain credit institutions—commonly referred to as the bank tax.

The government will proceed with its proposal for a risk tax

The Swedish government has revised its proposal for a new bank tax with the publication of a draft legal advice.

The Minister of Finance on 24 May 2021 announced that the government will proceed with its proposal for a risk tax to apply regarding certain credit institutions—commonly referred to as the bank tax.

Under the recent iteration of the bank tax proposal, changes include broader rules regarding the tax liability and the tax bases. However, it is uncertain whether the current proposal would be compatible with EU law.

The Ministry of Finance's original proposal was introduced in 2020. The new version of the bill is broadly similar to the prior version. For instance, liabilities within a taxpayer group would have to satisfy a threshold of SEK 150 billion for a credit institution to become liable for the bank tax. When the proposal was introduced in 2020, it was anticipated that only seven Swedish and two foreign credit institutions would be subject to the bank tax.

Under the revised proposal, only debts attributable to the credit institution's operations in Sweden would be taken into account. Therefore, with these broadened tax base rules, liabilities attributable to operations abroad, for example at Swedish banks' branches abroad, would also be taken into account for purposes of determining the tax liability and tax bases of Swedish credit institutions. Foreign credit institutions, however, would continue to determine the extent to which their liabilities are attributable to operations in Sweden.

The revised proposed tax rate would be 0.01 percentage point lower than as previously proposed. The tax would be levied from 2022, at which time the tax rate would be 0.05% and then would increase to 0.06% the following year.

KPMG observation

The proposed bank tax’s compatibility with EU law remains at issue, and in particular, whether the risk tax proposal could contravene EU state aid rules.
 

Read a May 2021 report (Swedish) prepared by the KPMG member firm in Sweden

 

 

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