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 supplementary provisions taking into account the Administrative Guidance published by the OECD throughout 2023 have been adopted. This means that the Swedish QDMTT meets the conditions for benefiting from another country’s QDMTT safe harbour rules. Among other changes 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 amendments entered into force on 1 January 2025, and the legislative changes apply for the first time for tax years beginning immediately after 31 December 2024. However, the reporting entity may request that all or certain of the provisions be applied already for tax years beginning immediately after 31 December 2023, i.e. at the same time as the provisions already in force.

Furthermore, legislative changes to the provisions based on the Administrative Guidance adopted in June 2024 have been implemented. The changes relates to, amongst others, the application of the recapture rule applicable to deferred tax liabilities, how to determine deferred tax assets and liabilities for Pillar Two purposes when the rules result in divergences between GloBE and accounting carrying value of assets and liabilities, as well as guidance on cross-border allocation of current and deferred taxes, allocation of profits and taxes in certain structures involving flow-through entities, and the treatment of securitisation vehicles. The legislative changes apply for fiscal years beginning immediately after 31 December 2025. However, in the same manner as for the rules that entered into force on 1 January 2025, it is possible to apply the rules retroactively as from 1 January 2024.

The Administrative Guidance adopted in January 2025 has not yet been implemented into Swedish law. However, such guidance still applies to the extent it is clarification of a question, etc. that does not require legislation.