High court ruling could hit Sweden’s tax revenues

A corporate taxation ruling by Sweden's Supreme Administrative Court (Regeringsrätten) could lead to the Swedish state missing out billions of kronor in tax revenues.

The court ruled on Friday in favour of a group of multinational companies and opened up the possibility of firms offsetting profits in their Swedish operations on subsidiaries in other EU countries, Sveriges Radio’s Ekot news program reports.

The ruling could have costly consequences for the Swedish state.

“It will be a question of enormous repayments from the public treasury,” Lars Jonsson, counsel representing some of the companies in the case to Ekot.

The court ruled that EU member states are obliged to treat companies equally with regards to risk regardless of where a company operates.

“This is incredibly important for our companies. It concerns hundreds of millions of kronor, perhaps as much as 500 million ($58.5 million).”

Swedish finance minister Anders Borg is critical of the ruling and argued on Friday that the government does not consider current Swedish regulations to be in breach of EU law.

The government will examine the court’s ruling to consider where regulations need amendment.

“We are going to see to it that the regulations are designed so that we can secure our tax revenues,” Anders Borg said to Ekot.