Sweden

Pillar Two implementation

The global minimum tax under the Organisation for Economic Co-operation and Development (OECD) Global Anti-Base Erosion (GloBE) rules and the European Union (EU) Directive 2022/2523 of 14 December 2022 has been implemented in Swedish law and entered into force on 1 January 2024. The Swedish rules include provisions covering the main elements of the rules that have been agreed by the Inclusive Framework. The Swedish rules contain a Qualified Domestic Minimum Top-Up Tax (QDMTT), an Income Inclusion Rule (IIR), and an Undertaxed Profits Rule (UTPR).

The Swedish rules currently in force do not, however, take fully into account the Administrative Guidance published by the OECD throughout 2023. To that end, proposed changes to the Swedish law were suggested on 19 March 2024. This concerns, for example, the measures necessary to ensure that the Swedish QDMTT meets the conditions for benefiting from another country’s QDMTT safe harbour rules. Among other changes suggested are modifications to the foreign tax credit act that enable offsetting foreign QDMTTs against taxes due under the Swedish controlled foreign company (CFC) rules. The proposed legislative changes are proposed to take effect on 1 January 2025 and apply for the first time for tax years beginning immediately after 31 December 2024. However, it is proposed that the reporting entity may request that all or certain of the proposed provisions be applied already for tax years beginning immediately after 31 December 2023 if it would be advantageous for the group. The amendments suggested on 19 March 2024 have been subject to a public consultation in Sweden and are expected to be adopted, possibly with some modifications, during 2024.