Sweden passes legislation on the implementation of the Global minimum tax

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EY Global

9 Jan 2024
Subject Tax Alert
Categories BEPS 2.0 Corporate Tax
Jurisdictions Sweden
  • On 13 December 2023, the Swedish Parliament passed the legislation (Legislation) on the domestic implementation of the European Union directive on the minimum level of taxation 2022/2523 (EU Directive).
  • The Legislation entered into force on 1 January 2024.
  • The Legislation overall aligns with the Directive and the OECD's Global Anti-Base Erosion (GloBE) rules. However, the Organisation for Economic Co-operation and Development's (OECD's) Administrative Guidance from July 2023 and December 2023, as well as some of the guidance from February 2023, has not been included.


On 13 December 2023, legislation (Legislation) on the implementation of the Global minimum tax was voted through the Swedish Parliament, reflecting some minor adjustments to the version that the Swedish Government had handed over on 26 October 2023 (Draft Legislation). The Legislation is primarily implemented through a new law, Lag om tilläggsskatt för företag i stora koncerner (SFS 2023:875). Procedural rules are implemented through an amendment to the existing Tax Procedures Act.

The Legislation applies to multinational enterprise (MNE) groups as per the GloBE rules, as well as domestic groups that, on a consolidated basis, meet the €750m threshold as per the EU Directive. The key provisions for Top-up tax allocation and reporting obligations, namely the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR), are included in the Legislation. Further, Sweden has chosen to introduce a domestic Top-up tax that ensures a minimum tax of 15% on Swedish resident entities on an aggregate basis. According to the rules, the domestic Top-up tax is to be applied before the IIR and the UTPR.

The Legislation includes provisions on the Transitional Safe Harbour rules. If certain criteria are met, jurisdictions can be excluded from the requirement to perform a full GloBE calculation and relieved from any Top-up tax exposure during the first three fiscal years after implementation of the Legislation (assuming the criteria are met for each year).

Ultimate parent entities in-scope of the Legislation will be required to file a GloBE Information Return with the Swedish Tax Agency. Further, if Top-up tax is due to be paid a GloBE Top-up Tax Return needs to be filed with the Swedish Tax Agency. The first GloBE Information Return should be filed no later than 18 months after the end of the fiscal year to which the report relates. Thereafter the deadline for filing the GloBE Information return is no later than 15 months after the end of the relevant fiscal year. The GloBE Top-up Tax Return should be filed one month after the filing of the GloBE Information Return.

Although the Legislation aligns overall with the Directive and the GloBE rules, it does not take into account any part of the July or December Administrative Guidance from the OECD and some aspects of the Administrative Guidance from February (published February 2023) have not been considered. As the Legislation does not include the July guidance, the QDMTT Safe Harbour and the UTPR Safe Harbour are not implemented through the Legislation.

Notable changes since the Draft Legislation

The final Legislation deviates from the Draft Legislation with respect to the definition of Acceptable financial accounting standards in Chapter 2 paragraph 20. According to the EUDirective, the definition includes International Financial Reporting Standards (IFRS or IFRS as adopted by the European Union pursuant to Regulation (EC) No 1606/2002 of the European Parliament and of the Council) and the generally accepted accounting principles (GAAP) of the Member States of the European Union and the Member States of the European Economic Area.

In the Draft Legislation, the Government assessed that the definition of Acceptable financial accounting standard needed to be clarified. At the time, the Government assessed that the reference to "and the generally accepted accounting principles of the Member States of the European Union and the Member States of the European Economic Area" should be removed from the definition. The EU Commission has since clarified that Swedish accounting standards could fall under the definition of Acceptable financial accounting standard even though they are not entirely in line with IFRS.

The final Legislation hence includes the wording "and the generally accepted accounting principles of the Member States of the European Union and the Member States of the European Economic Area," which is in line with the Directive.

Sweden-specific issues and need for future amendments

The legislative process has been subject to substantive comments during the public consultation phase, especially regarding the quality and accessibility of the wording and structure of the Legislation due to the short implementation timeline and complexity of the rules. Though some amendments have been made to both wording and structure since the public consultation phase, further adjustments could be made after implementation.

Some provisions of the Legislation include wording that does not correspond to the Directive or the GloBE rules. For example, in implementing article 9.1.3 of the GloBE Rules, regarding asset transfers between Constituent Entities after 30 November 2021 and before the start of a Transition Year, the Swedish rules apply tax value — rather than carrying value — for determining the basis of the transferred assets.

As the OECD's Administrative Guidance from December, July and partly from February has not been taken into consideration in the Swedish implementation, clarifications or guidance that affect the application of the rules have not been included in the Legislation. Hence, it is expected and important that amendments are implemented as a matter of priority.


Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young, Sweden
  • Hanna Ydén
  • Alexandra Westerling
  • Thomas Smit
  • Daniel King
  • Helena Norén

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.