Sweden is a fully tax compliant jurisdiction with a very large global network of double tax treaties and has an advantageous company law. Nor is Sweden immediately considered as a traditional ‘tax planning jurisdiction’. This provides Sweden with an excellent platform for the establishment of international holding structures. Major advantages of a holding company include :

   No taxation on dividends received from business shares.

    No withholding taxation on interest paid.

   No capital gains taxation from sales of business shares.

   Interest paid by the holding company is tax deductible.

   No thin capitalisation rules.

   No tax on capital contributions and transfers and no stamp duty.

   Losses may be carried forward indefinitely.

Dividend Distributions from Sweden to Curacao Swedish tax advisors are of the opinion that since the introduction of its New Fiscal Framework (i.e. imposing a corporate income tax rate of 34.5%) distributions from Sweden to Curacao qualify for the withholding tax exemption. Legal opinion on this structure can be provided on request.

Swedish Income Tax on Dividends Received Dividends received by a Swedish company from a business-related subsidiary will be exempt from Swedish corporate income tax regardless of the level of shareholding and holding period. All non-listed shares are always considered business shares. For listed shares, the exemption requires at least 10% share ownership and a minimum holding period of 12 months.

Swedish Controlled Foreign Corporation (CFC) Rules The Swedish CFC rules apply if the income of the participation is taxed under a low tax regime. The threshold for a ‘low-tax’ rate is below 15.4%. If the income is considered CFC income, the Swedish parent will be taxed in Sweden on its share of the CFC income. Tax liability occurs regardless whether the income has actually been distributed to the Swedish shareholder.

Swedish Withholding Tax on Dividends Distributed Dividends distributed from a Swedish company will be exempt from Swedish withholding tax provided the foreign receiver of the dividends is a company, taxable in its own jurisdiction in a manner similar to the taxation of dividends in Sweden and the receiving entity is of a similar kind of structure such as a share/limited company. In general, the rate has been defined as an income tax rate of at least 15.4%.

Swedish Capital Gains Taxes Regarding a Sale of Shares/Liquidation A Swedish company can realise capital gains without any capital gain taxation. Capital gains from the liquidation of business-related shares are exempt from corporate income tax. For publicly listed shares, the exemption requires at least 10% share ownership and a minimum holding period of 12 months. However, the tax exemption does not apply where the participation has been subject to the Swedish CFC rules.