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(Sep 24, 2012) The Swedish government has put forward a proposal to reduce the corporate tax rate in 2013 from the current level of 26.3% to 22%, an approximately 15% reduction. It is estimated that the measure would cost the state about SEK16 billion (about US$2.4 billion), SEK8.8 billion of which would be funded by stricter rules to limit the deductions companies often claim for interest payments on internal loans. The new rate is to be included in the government's forthcoming budget proposal and, if adopted, would apply from January 1, 2013. The European Union average corporate tax rate is reportedly 23.5%. (Sweden Unveils Plan to Slash CorporateTax Rates, THE LOCAL (Sept. 13, 2012).)
According to Minister for Enterprise Annie Lööf, "[w]e want to provide a stimulus for both small and large businesses … ." (
Aside from the corporate tax rate cut proposal, the government also proposed a tax break of up to SEK200,000 (about US$30,439) for individual investors in new businesses or for new financing of existing companies. (Sweden Unveils Plan to Slash Corporate Tax Rates, supra;
In the meantime, Finland's Minister of Finance Jutta Urpilainen stated her opposition to any further reduction of Finland's corporate tax rate in order to compete with Sweden's move. The Finnish rate was lowered at the beginning of 2012 from26% to 24.5%. According to Urpilainen, "[t]here are no possibilities for any new significant tax cuts in this situation … . I don't see that Finland should take part in any aggressive tax competition. I do not believe that there would be any winners in such a competition, but there would be many losers, because tax revenues would disappear." (Finance Minister Rejects Tax Competition, HELSINGIN SANOMAT (Sept. 18, 2012).) Urpilainen and Finnish Prime Minister Jyrki Katainen pointed out, moreover, that Finland had taken additional business-friendly measures, such as offering incentives for small and medium-sized companies and reducing energy taxes. Some Members of Parliament, however, indicated that they are in favor of adopting a 22% corporate tax rate to keep pace with Sweden. (
|Author:||Wendy Zeldin More by this author|
|Topic:||Taxation More on this topic|
|Jurisdiction:||Sweden More about this jurisdiction|
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Last updated: 09/24/2012