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Are the Swedish Cross-Border Group Deduction Rules compatible with European Union Law?

Tärnklint, Sofie LU (2015) HARN60 20151
Department of Business Law
Abstract
The thesis regards the Swedish group deduction rules and whether the rules are compatible with EU law. The rules are analyzed in relation to both primary law, the fundamental freedoms established in the TFEU and secondary law, the Parent-Subsidiary Directive (PSD). The author has established four requirements in the Swedish provisions that could possibly be in breach of EU law, namely; (1) the direct ownership requirement, (2) the need to calculate the loss according to two sets of rules, (3) the requirement that no business activity of a related company can be pursued in the state of the non-resident subsidiary after its liquidation and, (4) the size of the deduction may not exceed a positive result of the Swedish parent company.

The... (More)
The thesis regards the Swedish group deduction rules and whether the rules are compatible with EU law. The rules are analyzed in relation to both primary law, the fundamental freedoms established in the TFEU and secondary law, the Parent-Subsidiary Directive (PSD). The author has established four requirements in the Swedish provisions that could possibly be in breach of EU law, namely; (1) the direct ownership requirement, (2) the need to calculate the loss according to two sets of rules, (3) the requirement that no business activity of a related company can be pursued in the state of the non-resident subsidiary after its liquidation and, (4) the size of the deduction may not exceed a positive result of the Swedish parent company.

The author concludes that a group contribution does not fall within the scope of the PSD since it does not qualify as a "profit distribution". Moreover, the Swedish rules are incompatible with the freedom of establishment since the rules constitute non-justifiable restrictions. (Less)
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author
Tärnklint, Sofie LU
supervisor
organization
course
HARN60 20151
year
type
H1 - Master's Degree (One Year)
subject
keywords
Group contributions, Tax, Group deductions, Group reliefs, EU, Fundamental Freedoms, Parent-Subsidiary Directive, Profit distributions, Swedish tax law.
language
English
id
5434983
date added to LUP
2015-06-12 15:57:12
date last changed
2015-06-12 15:57:12
@misc{5434983,
  abstract     = {The thesis regards the Swedish group deduction rules and whether the rules are compatible with EU law. The rules are analyzed in relation to both primary law, the fundamental freedoms established in the TFEU and secondary law, the Parent-Subsidiary Directive (PSD). The author has established four requirements in the Swedish provisions that could possibly be in breach of EU law, namely; (1) the direct ownership requirement, (2) the need to calculate the loss according to two sets of rules, (3) the requirement that no business activity of a related company can be pursued in the state of the non-resident subsidiary after its liquidation and, (4) the size of the deduction may not exceed a positive result of the Swedish parent company.

The author concludes that a group contribution does not fall within the scope of the PSD since it does not qualify as a "profit distribution". Moreover, the Swedish rules are incompatible with the freedom of establishment since the rules constitute non-justifiable restrictions.},
  author       = {Tärnklint, Sofie},
  keyword      = {Group contributions,Tax,Group deductions,Group reliefs,EU,Fundamental Freedoms,Parent-Subsidiary Directive,Profit distributions,Swedish tax law.},
  language     = {eng},
  note         = {Student Paper},
  title        = {Are the Swedish Cross-Border Group Deduction Rules compatible with European Union Law?},
  year         = {2015},
}