Sweden: Income Tax

The package also included cuts to the corporate tax rate in two stages: from 22% to 21.4% starting 1 January 2019, then to 20.6% from 1 January 2021.

Sweden has implemented new participation exemption rules, making Sweden a competitive country for the establishment of holding companies. In general capital gains on shares held for business purposes are exempt from capital gains taxation. The regime is based on the concept that dividends and capital gains on foreign participations are exempt from tax under the same conditions as capital gains and dividends related to Swedish shares.

Corporate income tax is based on the company’s worldwide taxable business income computed according to the accrual method of accounting. Dividends on shares held for business purposes are normally tax free.