Sweden: Swedish position on capital attribution will lead to double taxation
30 June 2011
Sweden does not allow the attribution of capital to permanent establishments. It should change its position to help companies avoid double taxation, explains David Perrone of KPMG
Swedish GDP grew by 5.54% in 2010, and is projected to grow by 4.6% in 2011. It is not a stretch to say that the financial crisis has not had an impact on Sweden to the extent of other European countries. At the same time, Swedish financial institutions have had their share of financial problems and set-backs, which has resulted both in new regulations on the financial markets in Sweden and an increased focus on financial institutions by the Swedish Tax Agency (STA).
One specific area that is receiving increased attention from the STA is the taxation of permanent establishments (PE). Historically, the taxation of PEs has not been a significant focus of the STA. Nevertheless, with the onset of the financial crisis and the 2008 release of the OECD's Report on the Attribution of Profits to Permanent Establishments (2008 PE report), PE taxation has been receiving increasing...
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