An exception in the coupon tax act for foreign states

BO BROMAN (SD)

Madam Speaker! Today we are considering a bill that at first glance may be perceived as technical and impenetrable, but which fundamentally concerns something much more principled. It concerns justice and equal treatment, and about us in Sweden following the rules that we ourselves have been involved in deciding within Europe.

Let me therefore begin with the simple. Today, the Swedish state, the regions, the municipalities and the state AP funds pay no tax when they receive dividends from Swedish companies. This is logical. In practice, it is about the fact that otherwise the state would be taxing itself, which does not add any new resources but only moves money between different pockets.

When corresponding actors in other countries, for example a foreign state or a public pension institution, receive dividends from Sweden, a special so-called coupon tax is deducted in many cases. This is where the problem arises. According to EU rules on the free movement of capital, comparable actors must be treated equally. In December 2024, the Supreme Administrative Court ruled that it is not compatible with these rules to tax a foreign public pension institution when Swedish pension funds are tax-exempt. It is therefore not just a political issue, but a legal necessity to act.

Madam Speaker! The government's proposal is fundamentally simple. Foreign states and counterparts to our regions and municipalities shall not pay coupon tax on dividends from Sweden, provided that they belong within the EEA or in countries with which Sweden has tax treaties and a functioning exchange of information. It is therefore not about opening any back doors, but rather about treating public actors in other countries in the same way as our own. It is both reasonable and necessary.

Madam Speaker! There is also a broader perspective. Sweden is a country that is dependent on investments and functioning capital markets. If we maintain rules that conflict with EU law, we risk not only legal proceedings but also appearing as a country that does not follow the rules of the game, and that benefits no one.

At the same time, it is important to emphasize that the reform does not erode the Swedish tax base in an irresponsible manner. It concerns a limited circle of public actors, not private companies or tax planning. Furthermore, there are requirements for tax agreements and information exchange, which is central to maintaining control and transparency.

Madam Speaker! We Sweden Democrats support the government's bill and the committee's proposal for a decision. We do so because they ensure equal treatment between Swedish and foreign public actors. They also adapt Swedish legislation to current EU law and case law and contribute to a more predictable and legally secure tax system. Perhaps most importantly, however, is that they restore the logic in the system. The state should not tax itself, and we should not treat the corresponding functions of other states differently when the situations are fundamentally comparable.

This is not an ideological battle issue but a question of order and clarity in the legislation. Sometimes that is precisely the most important task of politics. I therefore move for approval of the committee's proposal for a decision.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Marie Olsson (S)

Madam Speaker! I want to start with the obvious: Sweden shall follow EU law. When courts establish that our legislation does not hold, it must be changed. That is not controversial. What is controversial is that the government has put us in this situation in the first place. This does not come as any surprise.

The proposal exempts foreign states and counterparts to Swedish regions and municipalities from coupon tax on Swedish dividends. The purpose is to adapt the law to EU law following court rulings on prohibited differential treatment.

Already at the beginning of this parliamentary term, a completed investigation lay on the government's desk. There was a draft for a referral to the Council on Legislation, and there was a thoroughly worked-out proposal for a modern withholding tax on dividends that could have applied as early as 2024. The proposal addressed several issues regarding tax evasion, which is an area where the government has done far too little during this parliamentary term. But the government chose to hide the proposal in a bureaucratic drawer, and that is why we are here today.

The government chose not to act. We Social Democrats have interpellated on the issue, warned of the consequences, and requested a decision. What did we get? We got passivity, procrastination, and silence. Now we stand here – not because the government has taken responsibility, but because it has been forced – by courts, EU law, and an inability to act in time. It is not good leadership, but reactive crisis management.

Madam Speaker! It is also worth comparing with Finland, which saw the problems with the source tax and the risks with manager-registered shares, the lack of information about ultimate beneficiaries and international tax planning. Finland acted.

The Finnish reform entered into force as early as 2021. It was based on stricter reporting, registered administrators, and a clearer responsibility to ensure that the correct tax is collected at the time of distribution. If information regarding the final recipient is not provided, a 35 percent withholding tax is charged in Finland. For unidentified Finnish persons residing in Finland, the tax can be 50 percent. The purpose is clear: it should not be profitable to hide behind administrator registration.

Finland has also built the system on the OECD's TRACE model, where registered intermediaries are responsible for identification, reporting, and correct withholding tax directly at the time of payment. This is the difference. Finland modernized, while Sweden waited. Finland tightened the control, while Sweden let the issue lie. Finland acted before the problems became acute, while Sweden's government acted only when the courts forced it.

Madam Speaker! The bill itself is necessary. We Social Democrats say yes to adapting the coupon tax law to EU law, as appears from our reservation. We see the need for a legally sustainable order under EU law, but it is not enough to do the bare minimum.

What does the government's line mean in practice? Well, it opens up for new exceptions and creates more complicated boundaries. At the same time, one chooses not to provide clear guidance on how foreign entities should be assessed, but instead leaves central issues to the judiciary. This means increased uncertainty, more disputes, a greater administrative burden, and risks of tax losses.

We already know that the government itself expects increased administration and more refund cases during a transition period. We also know that the coupon tax revenues were estimated to amount to around 11 billion kronor in 2024. Still, the government says: We can follow up on this later.

Madam Speaker! It is not enough. When rules affecting billions are changed, there must be a clear, time-bound follow-up. It must be followed up how the reform affects the public finances. It must be followed up how the Swedish Tax Agency's control possibilities are affected. And it must be followed up how the system functions in practice.

This is not bureaucracy. It is responsibility, and that is a word that this government does not want to be held accountable for in this area. It is fundamentally about order and clarity in the tax system.

Sweden has a coupon tax law from the 1970s. It is not built for today's internationalized and digitized capital market with fund registration. The previous Social Democratic government knew this. Therefore, the proposal for a new law on withholding tax on dividends was put forward. It would provide a more modern, robust and efficient regulatory framework. It would strengthen control through better information reporting. It was also estimated to strengthen public finances by almost 1 billion kronor annually.

But the current government set this aside. Instead of reform, it is passivity. Instead of control, it is uncertainty. Instead of modernization, it is patching and mending. And today, the Riksdag has to deal with the consequences.

Madam Speaker! Politics is about responsibility. Responsibility is to act in time, not when one is forced to. Responsibility is to protect the tax base, not to leave it to chance. Responsibility is to learn from our neighboring countries, not to pretend that Sweden can wait while the capital market changes.

We Social Democrats take this responsibility. Therefore, we say yes to adapting the law to EU law. But we also say: It is not enough. We demand a clear, time-bound follow-up. We demand better control. And we demand that the government returns with a modern, coherent legislation on withholding tax on dividends.

Had the government handled the completed investigation and the referral to the Council of Legislation, which were on their desk at the beginning of the mandate period, we would not have had to stand here today with yet another emergency patching of an outdated system.

With this, I move for approval of the reservation under point 2.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Adam Reuterskiöld (M)

Madam Speaker! We are now debating the Committee on Taxation's report SkU26 on an exception in the coupon tax rules for foreign states.

This is a proposal concerning how Sweden should design its tax system in an international reality where we must comply with EU law and at the same time safeguard a clear, predictable and competitive tax base.

As I have said several times before in this speaker's chair, the Moderaternas starting point is simple: Sweden shall have a tax system that is legally secure, uniform, and in line with international rules. But it must also be clear and long-term sustainable for the public finances.

Madam Speaker! The coupon tax is a withholding tax on dividends from Swedish companies and funds to foreign owners. It fulfills an important function in the international tax system and ensures that capital income arising in Sweden is also taxed in Sweden, unless otherwise regulated through tax treaties.

What we are now addressing is an adjustment of this system. The background to the matter is clear and simple. Through rulings in the Court of Justice of the EU and Swedish court practice, it has been established that the current order is not compatible with EU law, as it treats Swedish public actors more favorably than corresponding foreign public investors.

This is fundamentally a question of equal treatment within the EU's internal market and the free movement of capital.

Madam Speaker! The proposal means that foreign states and their counterparts to municipalities, regions and public bodies shall be exempted from the coupon tax, provided that they are either within the EEA or have an agreement with Sweden that ensures information exchange.

It is an important distinction. It ensures that we do not open up for tax evasion. We can still maintain control and transparency in the taxation.

Madam Speaker! It is important to say that this is not about us in Sweden giving up the right of taxation or weakening our tax base. It is about adapting the regulatory framework to the requirements that follow from EU law and from how we actually tax on the capital market.

In an open economy like Sweden, it is necessary that our rules are competitive and non-discriminatory. If Sweden deviates from these principles, we risk not only legal proceedings but also diminished confidence from international investors.

I also want to emphasize at the same time the importance of the principle of neutrality and transparency in the tax system. The central point is that equal cases are treated equally. If Swedish public actors – it could be state pension funds or municipal investments – are exempt from the coupon tax, then corresponding foreign public actors must be treated in the same way. It is a self-evident matter in a rule of law and in a functioning internal market.

But there is also another important aspect. It is that the tax system must be understandable and consistent. Exceptions must be clearly justified and as few as possible. Otherwise, the legitimacy of the entire system is eroded.

Madam Speaker! It is also important to introduce a Swedish perspective on transparency in public finances. When different types of public actors invest in Swedish assets, we must be able to follow and understand how the taxation impacts. It is crucial for both control and trust.

This proposal contributes to exactly this by creating uniformity between Swedish and foreign public investors, which reduces the distortion. At the same time, we must not turn a blind eye to the fact that this is an adjustment that can also affect the state's tax revenues. When the exemption is expanded, the coupon tax base decreases slightly. But the Moderaternas view is that this is a necessary adjustment to maintain a functioning regulatory framework in an EU law context. The alternative would have been continued legal uncertainty, potential repayment demands, and a system that does not treat all actors equally. It would have been worse both for the state and for the legitimacy of the tax system.

Madam Speaker! Fundamentally, it is about three things. For the first, it is about Sweden following EU law and upholding the principle of free movement of capital. For the second, it is about us having a tax system that is neutral and that treats public actors equally regardless of country of origin. For the third, it is about us having a system that is predictable, transparent, and long-term sustainable.

It is this way we build a strong climate for investments while simultaneously safeguarding the public finances.

With this, I vote in favor of the committee's proposal in the report.

(Applause)

The deliberation was hereby concluded.

(A decision was to be taken on 20 May.)

The speech at riksdagen.se, in Swedish (opens in a new tab)