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Sweden’s next move to combat tax base erosion – Changing the rules for deductions of interest

Cederholm Berglund, Angelica LU (2018) JURM02 20181
Department of Law
Faculty of Law
Abstract
A part of the phenomenon known as tax base erosion and profit shifting (BEPS) occurs when multinational entities (MNEs) shift profits through the aid of interest payments and interest deductions. Sweden has attempted to address this issue through introducing rules limiting interest deductions in national legislation. Through the adoption of the first Anti-Tax Avoidance directive (the ATAD 1) by the European Union (the EU) a need to oversee Sweden’s national rules arose, since as a member of the EU Sweden is obligated to implement EU legislation.

The aim of this thesis is to examine how Sweden has chosen to implement the ATAD 1. The directive had to be implemented no later than den 31st of December 2018 and Swedish law makers have... (More)
A part of the phenomenon known as tax base erosion and profit shifting (BEPS) occurs when multinational entities (MNEs) shift profits through the aid of interest payments and interest deductions. Sweden has attempted to address this issue through introducing rules limiting interest deductions in national legislation. Through the adoption of the first Anti-Tax Avoidance directive (the ATAD 1) by the European Union (the EU) a need to oversee Sweden’s national rules arose, since as a member of the EU Sweden is obligated to implement EU legislation.

The aim of this thesis is to examine how Sweden has chosen to implement the ATAD 1. The directive had to be implemented no later than den 31st of December 2018 and Swedish law makers have worked actively during several years to develop the implementing legislation. This resulted in the adoption of new Swedish legislation on the 14th of June 2018.

The earlier versions of Swedish legislation in the area concerning interest deductions faced criticism on several accounts, as did the proposals which lead to the recently adopted new legislation. Arguably most notably, the European Commission started an infringement procedure concerning Sweden’s rules on interest deduction limitations. It has therefore been of interest to examine whether the new legislation has addressed the previous criticism, and whether Swedish legislation in the area could still run the risk of infringing on EU law. (Less)
Abstract (Swedish)
En del av det fenomen som kallas skattebaserodering och vinstförflyttning (BEPS) händer när multinationella koncerner flyttar vinster med hjälp av räntebetalningar och ränteavdrag. Sverige har försökt angripa problemet genom att introducera regler som begränsar ränteavdrag i sin nationella lagstiftning. Genom antagande av den Europeiska Unionens (EU) första Skatteflyktsdirektiv (ATAD 1) så har det uppstått ett behov av att se över de svenska nationella reglerna, eftersom som en medlemsstat av EU såhar Sverige en plikt att implementera EU-lagstiftning.

Syftet med denna uppsats är att undersöka hur Sverige har valt att implementera ATAD 1. Direktivet ska vara implementerat senast den 31:a december 2018 och svenska lagstiftare har arbetat... (More)
En del av det fenomen som kallas skattebaserodering och vinstförflyttning (BEPS) händer när multinationella koncerner flyttar vinster med hjälp av räntebetalningar och ränteavdrag. Sverige har försökt angripa problemet genom att introducera regler som begränsar ränteavdrag i sin nationella lagstiftning. Genom antagande av den Europeiska Unionens (EU) första Skatteflyktsdirektiv (ATAD 1) så har det uppstått ett behov av att se över de svenska nationella reglerna, eftersom som en medlemsstat av EU såhar Sverige en plikt att implementera EU-lagstiftning.

Syftet med denna uppsats är att undersöka hur Sverige har valt att implementera ATAD 1. Direktivet ska vara implementerat senast den 31:a december 2018 och svenska lagstiftare har arbetat aktivet under flera år för att ta fram den implementerande lagstiftningen. Detta resulterade i antagandet av ny svensk lagstiftning den 14:e juni 2018.

Tidigare versioner av svensk lagstiftning på området som rör ränteavdrag har mött kritik på flera punkter, liksom förslagen som ledde till den nyligen antagna lagstiftningen. Möjligtvis mest anmärkningsvärt är att den Europeiska Kommissionen påbörjade ett överträdelseförfarande gällande Sveriges regler om begräsningar för ränteavdragsbegränsningar. Det har därför varit av intresse att undersöka om den nya lagstiftningen har adresserat den tidigare kritiken, samt huruvida svensk lagstiftning på området fortfarande riskerar att överträda EU-lagstiftning. (Less)
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author
Cederholm Berglund, Angelica LU
supervisor
organization
course
JURM02 20181
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
taxes, eiscal law, EU law, OECD, interest deductions, ATAD
language
English
id
8955503
date added to LUP
2018-09-20 19:13:50
date last changed
2020-06-12 16:05:47
@misc{8955503,
  abstract     = {{A part of the phenomenon known as tax base erosion and profit shifting (BEPS) occurs when multinational entities (MNEs) shift profits through the aid of interest payments and interest deductions. Sweden has attempted to address this issue through introducing rules limiting interest deductions in national legislation. Through the adoption of the first Anti-Tax Avoidance directive (the ATAD 1) by the European Union (the EU) a need to oversee Sweden’s national rules arose, since as a member of the EU Sweden is obligated to implement EU legislation. 

The aim of this thesis is to examine how Sweden has chosen to implement the ATAD 1. The directive had to be implemented no later than den 31st of December 2018 and Swedish law makers have worked actively during several years to develop the implementing legislation. This resulted in the adoption of new Swedish legislation on the 14th of June 2018. 

The earlier versions of Swedish legislation in the area concerning interest deductions faced criticism on several accounts, as did the proposals which lead to the recently adopted new legislation. Arguably most notably, the European Commission started an infringement procedure concerning Sweden’s rules on interest deduction limitations. It has therefore been of interest to examine whether the new legislation has addressed the previous criticism, and whether Swedish legislation in the area could still run the risk of infringing on EU law.}},
  author       = {{Cederholm Berglund, Angelica}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Sweden’s next move to combat tax base erosion – Changing the rules for deductions of interest}},
  year         = {{2018}},
}