Sweden: Transfer pricing documentation, CbC reporting | KPMG | GLOBAL
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Sweden: Transfer pricing documentation, country-by-country reporting legislation passed by parliament

Sweden: Transfer pricing documentation, CbC reporting

Sweden's parliament on 1 March 2017 approved legislation to implement transfer pricing documentation and country-by-country reporting rules.


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Transfer pricing documentation

The new measures, effective 1 April 2017, adopt transfer pricing documentation rules that reflect the standards in the OECD's base erosion and profit shifting (BEPS) Action 13 final report. The legislation complies with OECD’s recommendations, so that the transfer pricing documentation will consist of a Master file and Local file(s). 

The new documentation requirements are effective for financial years beginning 1 April 2017 or later. The Master file must be prepared by the time when the tax return of the parent company is due, and the Local file must be prepared by the time the tax return of the local entity is due.

Companies will be exempt from the requirement to file transfer pricing documentation if the year prior to the subject financial year, the group to which the company belongs had less than 250 employees and had either reported revenues not exceeding SEK 450 million or total assets not exceeding SEK 400 million.

The legislation expands the scope of those taxpayers required to prepare transfer pricing documentation to include:

  • Foreign companies with permanent establishments in Sweden
  • Swedish companies with permanent establishments abroad
  • Swedish unlimited partnerships (pass-through entitles—Handelsbolag) if there are transactions with a foreign company and the unlimited partnership’s profits are taxed in a Swedish company that is in a group with both the unlimited partnership and the foreign company

Swedish companies, unlimited partnerships or permanent establishments that are not required to prepare transfer pricing documentation are nonetheless required to price all internal transactions at arm’s length.

Country-by-country reporting

Also, there are new rules introduced for country-by-country (CbC) reporting and for the automatic exchange of those CbC reports with tax authorities both in the EU and in countries and jurisdictions which have signed the multilateral agreement on automatic exchange of information for CbC reports—the Multilateral Competent Authority Agreement (MCAA).

The CbC report will be due by 31 December 2017 at the latest (pertaining to financial years commencing 1 January 2016 or later). Under the new rules, multinational groups for the year prior to the financial year with revenues exceeding SEK 7 billion will be required to submit certain data every year for each jurisdiction in which they are active. Normally, it will be the parent company of the multinational group that will submit the CbC report to the tax authority of the country where it is active.

If there is no requirement to submit a CbC report in the country where the parent company is a resident, or if the tax authority in that country fails to share the CbC report with the Swedish tax agency, the Swedish subsidiary may be required to submit the CbC report on behalf of the parent company. In such instances, the Swedish company must notify the Swedish tax agency by 30 April 2017 for financial years ending before 1 April 2017 as to which group entity will be filing the CbC report on behalf of the group.


Read a March 2017 report prepared by the KPMG member firm in Sweden

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