Sweden’s government has submitted proposals to make joint ventures and their subsidiaries directly liable for Swedish national top-up tax under Pillar Two, with the amendments proposed to take effect from 1 March 2027.
Sweden’s government has submitted a proposal to the Council on Legislation to make Swedish joint ventures and their subsidiaries directly liable for Swedish national top-up tax under the Pillar Two rules.
The legislative amendments, published by the Ministry of Finance on 3 September 2026, are intended to align Sweden’s rules with OECD Pillar Two administrative guidance and prevent potential double taxation.
Under the proposal, a Swedish joint venture would be liable for the full amount of Swedish national top-up tax calculated and allocated to it. The same treatment would apply to a subsidiary of a joint venture where the entity belongs to a group within the scope of the Minimum Taxation Directive (2022/2523).
The changes address the current rules under which the tax liability relating to joint ventures and their subsidiaries is not imposed directly on those entities. This can prevent Sweden’s domestic minimum tax from qualifying for other jurisdictions’ simplification rules, potentially resulting in the Income Inclusion Rule or Undertaxed Profits Rule being applied abroad and creating a risk of double taxation.
The proposal would also introduce definitions of joint venture and subsidiary of a joint venture, require in-scope entities liable for national top-up tax to register with the Swedish Tax Agency, and require them to submit a top-up tax return. Registration would generally be required within 15 months after the end of the relevant tax year.
The amendments are proposed to enter into force on 1 March 2027 and apply to tax years beginning after 28 February 2027. The rules could also be applied retroactively to tax years beginning after 31 December 2023, subject to the proposed conditions.
Earlier, Sweden’s Ministry of Finance proposed amendments and additions to the Swedish Additional Tax Act to align the legislation with the latest Administrative Guidance issued by the OECD/G20 Inclusive Framework on BEPS.
