On 13 October 2020, the Swedish Ministry of Finance has issued a press release, where they confirm that a draft bill was submitted to the Parliament to restrict deductions for interest expenses paid to non-cooperative jurisdictions.
The proposals mean that rules are introduced into Swedish law that in an effective and proportionate manner prevent non-cooperating jurisdictions from applying methods that do not meet international standards and review criteria. It is therefore proposed that, as a countermeasure, a ban on deductions be introduced for internal and external interest expenses on liabilities to companies in certain non-cooperating jurisdictions. It is further proposed that the application of the CFC rules should be ensured in the case of Trinidad and Tobago.
The new prohibition on deductions is proposed to mean that a company may not deduct interest expenses relating to a debt to a company belonging to a jurisdiction that is included in a valid and published list of states or jurisdictions outside the European Union (EU) that have been jointly assessed by the Member States be non-cooperative in the field of taxation.
The bill also proposes that the term fair value at the time of taxation in some cases be changed to net sales value. The proposal is a consequential change to a previous amendment to the Annual Accounts Act, where the term fair value has been given a new meaning.
The amendments are proposed to enter into force on 1 January 2021.
