Thursday, September 13, 2012

The Swedish government will lower the corporate tax rate to 22 percent

Stockholm Sep. 13, 2012
The The Swedish government will lower the corporate tax rate to 22 percent, from the current 26.3 percent. The reduction applies from January 1, 2013.

The reform is expected to be financed partly by the tighter deduction rules for the internal interest. The Swedish government says that: "The significant reduction in the corporate tax rate is expected to strengthen the investment climate and growth in Sweden." To further strengthen the conditions for entrepreneurs the Swedish Government announced that it will introduce an investment deduction. This will allow natural persons investing in businesses to make a fifty percent deduction in their tax return.

Prime Minister Fredrik Reinfeldt said at a press conference that the entire year's budget work has been done in an environment where "Sweden is different from the rest of Europe. We are in a position where we can discuss how we can strengthen Sweden's competitiveness. An important part of this is the corporate tax rate, which is now lowered." It is "probably the most harmful tax of all," he said. 

Corporate tax is clearly in focus even for governments that may not have room to lower it, but they choose to lower it anyway to enhance competitiveness, for it is "extremely important for investment," he said.

The minister for enterprise Annie Lööf said that after cutting the corporate tax rate Sweden is below the average for both the OECD and the EU, and it strengthens the conditions for higher employment and higher growth.

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