On 3 May 2018, the draft law was submitted to the Swedish Parliament for the introduction of new tax rules for the corporate sector. The proposal comprises new rules on re interest deductions, financial leasing and a reduced corporate tax rate. The draft law is mainly based on the Ministry of Finance’s consultation on a proposal that was issued 20 June 2017. The main proposals includes:
- The existing corporate income tax rate of 22% would be reduced to 21.4% in 2019 and then further reduced to 20.6% in 2021;
- Under the new general interest limitation rules, the deductibility of net interest expense would be limited to 30% of earnings before interest, tax, depreciation and amortization (EBITDA);
- The proposal brings greater neutrality in the taxation of own and borrowed capital and contains exemption rules favoring small and medium-sized enterprises. Only 1% of businesses is expected to be subject to the restriction rules, while small and medium-sized companies receive a tax cut;
- Introduction of tax rules regarding financial leasing;
- Introduction of accelerated depreciation on tenement building;.
- Increased standardized income on tax allocation reserves;
- Introduction of standardized income on contingency reserves for non-life insurance companies; and
- The proposed new rules are due to enter into force on 1 January 2019.
