Sweden’s draft bill would restrict access to tonnage taxation for shipping companies with outstanding state aid recovery orders, introduce mandatory revocation rules, and allow reapplication once the aid and interest are fully repaid. The measures are scheduled to take effect on 1 January 2027.
Sweden’s Ministry of Finance has published a draft bill on 1 October 2026 proposing special provisions on the recovery of state aid under Sweden’s recently improved tonnage tax regime.
On 11 June 2026, the Swedish Parliament approved broad enhancements to the tonnage tax regime (Prop. 2025/26:243), expanding the scope of eligible shipping activities and lowering minimum gross tonnage requirements. These amendments entered into force on 20 July 2026, and apply to tax years beginning after 31 December 2026.
EU Commission condition
On 7 May 2026, the European Commission approved Sweden’s renewed tonnage tax regime as compatible State aid for ten years (1 January 2027 – 31 December 2036). As a mandatory condition of this approval under EU law (the Deggendorf principle), Sweden was required to complement its tax code with rules barring companies subject to an outstanding state aid recovery order from receiving tonnage tax benefits.
Core legal provisions of the draft bill
The proposal introduces changes to the Swedish Tax Procedure Act:
- Restrictions on new applicants: The Swedish Tax Agency cannot approve a company’s application for tonnage taxation if the company has an outstanding state aid recovery order under a European Commission decision declaring the aid unlawful and incompatible with the EU internal market.
- Mandatory revocation and payment deadline: The Swedish Tax Agency must revoke an existing tonnage tax approval if the company fails to repay the full amount of recoverable state aid, including interest, within the prescribed deadline. However, revocation can be avoided if the company pays the full amount within the same tax year in which the payment deadline fell due, provided payment is completed before the Swedish Tax Agency issues its revocation decision.
- Effective date of revocation: Revocation takes effect retroactively, starting no earlier than the tax year in which the original payment deadline fell due.
- Reapplication after revocation: The standard 10-year waiting period for reapplying after revocation does not apply to cases involving unpaid state aid recovery orders. Companies may reapply once the recovered aid and accrued interest have been paid in full.
- Exemption from revocation fees: The Swedish Tax Agency will not charge a revocation fee when tonnage tax approval is withdrawn because a company has failed to comply with a state aid recovery order.
Annual reporting obligations
To enable the Swedish Tax Agency to monitor compliance, companies approved for tonnage taxation must disclose in their annual income tax return whether they are or have been subject to a European Commission state aid recovery order during the relevant tax year, even if the amount has already been fully repaid.
Implementation date
The proposed legal provisions enter into force on 1 January 2027. Revocation decisions under these new rules cannot apply to any tax years beginning before 1 January 2027. The Swedish government expects the proposal to have no net impact on public finances or create additional administrative burdens.
