Global Tax Alert | 18 December 2013

Swedish SAC denies leave to appeal two shareholder loan cases

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The Swedish Supreme Administrative Court (SAC) decided recently not to grant leave to appeal in two cases concerning shareholder loans. The SAC did not find a reason to grant leave to appeal and the judgments delivered by the Administrative Court of Appeal have thereby entered into force.

The requisites, in order for the SAC to grant leave to appeal in cases of this nature, are that a ruling in the case may be of importance as a precedent or that there are serious reasons for granting leave to appeal, such as the outcome of the proceedings in the Administrative Court of Appeal is due to gross omission or gross error.

The cases have mostly been a matter of evidence, where the Administrative Court of Appeal has held that the Swedish Tax Agency had not fulfilled its burden of proof demonstrating that the interest rate on the shareholder loans differed from what would have been agreed upon between two independent companies.


During recent years, the Swedish Tax Agency has been very aggressive towards arrangements involving outbound shareholder loans, scrutinizing the interest rates on the shareholder loans between the parties and in numerous cases denying deductions for such interest payments. Initially, the Swedish Tax Agency was successful in a number of cases in various administrative courts. However, those judgments were subsequently appealed and overruled by the Administrative Court of Appeal, which generally has ruled in the taxpayers' favor.

The judgments, delivered by the Administrative Court of Appeal, clarify the importance of presenting OECD compatible materials in order to justify the interest rates.

In the above mentioned cases, the Court found that the Tax Agency's reference material could not serve as a starting point in determining the interest rate that can be considered as an arm's length rate. Hence, there was no reason to change the interest rates set by the companies.

For additional information with respect to this Alert, please contact the following:

Ernst & Young AB, Stockholm
  • Mikael Hall
    +46 8 520 592 35
Ernst & Young LLP, Scandinavian Tax Desk, New York
  • Martin Norin
    +1 212 773 2982

EYG no. CM4044