Sweden’s Ministry of Finance has referred proposed amendments to the Swedish Additional Tax Act to the Council on Legislation, including new Pillar Two safe harbours and changes to tax credit, demerger and transitional deferred tax rules to align with the latest OECD/G20 Inclusive Framework Administrative Guidance.
Sweden’s Ministry of Finance has proposed amendments and additions to the Swedish Additional Tax Act (lagen om tilläggsskatt) to align the legislation with the latest Administrative Guidance issued by the OECD/G20 Inclusive Framework on BEPS.
The proposed bill, issued on 13 August 2026, and signed by Finance Minister Elisabeth Svantesson and Johan Lindqvist, proposes new simplification rules, or safe harbours, alongside changes to existing Pillar Two provisions.
The Swedish Additional Tax Act entered into force on 1 January 2024 to implement the EU Minimum Taxation Directive and the OECD/G20 Inclusive Framework’s Pillar Two model rules.
New Pillar Two safe harbours
The referral proposes two permanent safe harbours for jurisdictions approved as having a parallel minimum taxation system.
Under the Side-by-Side Safe Harbour in Chapter 8, Section 18 a, the top-up tax is deemed to be zero under both the primary rule, the Income Inclusion Rule (IIR), and the secondary rule, the Under-taxed Profits Rule (UTPR).
The provision applies where the ultimate parent entity (UPE) of an MNE group is located in a jurisdiction approved by the OECD/G20 Inclusive Framework as having a parallel minimum tax system covering both domestic and foreign income, known as a Qualified Side-by-Side Regime.
A separate Ultimate Parent Entity (UPE) Safe Harbour is proposed under Chapter 8, Section 14. This applies specifically to the UTPR and provides that the top-up tax under the UTPR is deemed to be zero for the state where the parent company is located, provided the Inclusive Framework has approved that state as having a parallel minimum tax system for domestic income.
Substance-based tax incentives
The proposal also introduces a Substance-Based Tax Incentive Safe Harbour under Chapter 4, Section 17 c.
The rule would allow MNE groups to treat certain qualified tax incentives that are closely linked to local economic substance as an addition to their Adjusted Covered Taxes.
The amount eligible for this treatment would be subject to a Substance Cap, calculated based on the group’s payroll costs and depreciation of eligible tangible assets in the relevant jurisdiction.
Tax credit classifications clarified
Changes to Chapter 2, Sections 29 and 30 would establish a specific legal definition of a tax credit (skattetillgodohavande).
The proposed rules distinguish between qualified refundable tax credits (kvalificerat skattetillgodohavande), market-transferable tax credits and other tax credits (övrigt skattetillgodohavande).
The classifications are intended to prevent double taxation distortions and maintain consistency with the Pillar Two framework.
Changes following group demergers
The referral proposes amendments to Chapter 1, Section 10 concerning the EUR 750 million consolidated revenue threshold following a group demerger.
The revenue test would apply separately to each group created through the demerger. The proposal also clarifies that the test for the second to fourth years after the demerger includes the demerger year itself.
The change is intended to bring the Swedish provision into line with the literal interpretation of the OECD Model Rules and the EU Directive.
Deductible dividend regimes
Under proposed changes to Chapter 7, Section 68, the adjusted profits of a parent company subject to a deductible dividend system would be reduced by the amount distributed as a deductible dividend within 12 months after the end of the fiscal year.
The reduction cannot bring adjusted profits below zero.
Transitional deferred tax rules
The proposal would also clarify the treatment of deferred tax assets and liabilities during the transition to the minimum tax rules.
The changes would restrict the use of permanent differences arising before the minimum tax rules entered into force. They would also limit deferred tax assets resulting from tax benefits granted by a general government, reflecting the OECD’s Grace Period and Grace Period Limitation principles.
Rules limited to large MNE groups
The minimum tax rules apply only to large MNE groups with annual consolidated revenues of at least EUR 750 million.
The proposed safe harbours are intended to reduce administrative and compliance costs for qualifying groups by removing the need for full top-up tax calculations where the relevant safe harbour conditions are met.
In Sweden, the rules are estimated to cover around 150–160 corporate groups with Swedish parent companies, representing approximately 20,000 constituent entities. Of these, about 7,000 are in Sweden and 13,000 are abroad.
A further 2,000–8,000 Swedish constituent entities belonging to foreign-parent MNE groups are expected to fall within the scope. Small and medium-sized enterprises (SMEs) are not affected.
Earlier, on 19 March 2024, the Swedish Ministry of Finance (MoF) released proposed amendments to the Act on Additional Tax, aimed at incorporating the Pillar Two global minimum tax as outlined in Council Directive (EU) 2022/2523.
