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Press release from Ministry of Finance

Regulations on taxation initiation to be reviewed


The Government has been informed that the current Swedish regulations on taxation initiation can lead to double taxation in some cases when companies undergo restructuring through a merger or a division. The Government will undertake an urgent review of the regulations.

The Income Tax Act contains provisions regulating various situations in which taxation is carried out for the first time ('taxation initiation'). 'Taxation initiation' means that an asset that previously did not fall under Swedish tax regulations will now do so. These rules are applicable, for example, when a foreign subsidiary is merged with its Swedish parent company and the subsidiary operates from then on as a foreign branch of the Swedish company.

In certain cases, applying the regulations in such a situation can lead to double taxation of the activities that, following the merger, are taxable in Sweden. The double taxation arises because the value on which taxation in Sweden is based sometimes differs from the value on which the foreign taxation was based. Such double taxation is unintended and can be a disincentive to mergers and divisions that make sense for business reasons.

For this reason, the Government will undertake an urgent review of the regulations on taxation initiation in connection with mergers and divisions.


Fredrik Kornebäck
Press Secretary to Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Erik Sjöstedt
Deputy Director/Deputy Head of Division for Taxes on Personal and Business Income
Phone + 46 8 405 38 82