Court ruling could hit Swedish tax take -tax board

Mon Dec 24, 2007 5:25pm EST
 
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STOCKHOLM, Dec 24 (Reuters) - The Swedish state could lose 60 billion Swedish crowns ($9.1 billion) in tax revenue a year after a legal victory by investment firm Industrivarden (INDUa.ST), Swedish media reported on Monday.

Sweden's tax authorities said the judgement allowing the offsetting of some interest payments against profit could mean that state income from company tax falls dramatically.

"Corporate tax could, in principle, be voluntary," Jan-Erik Backman, chief analyst at the Swedish National Tax Board, told news agency TT.

The legal judgement in Sweden's Supreme Administrative Court gave Industrivarden the right to offset profit against interest payments by newly formed daughter companies.

"According to our analysis, the state treasury already loses around 10 billion a year. The nightmare scenario is that that could reach 60 billion if big companies adopt this method," Backman said.

The state takes in around 100 billion crowns in corporate tax annually. (Reporting by Simon Johnson; Editing by Jan Paschal)

 

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