Lindahl law firm has taken part in the Swedish Bar Association’s work to produce a consultation response on the European Commission’s proposal for a Council Directive on a global minimum tax for multinational companies in the EU. The consultation response was published on the Government’s website on 4 February 2022. See the consultation response here (in Swedish).
The Directive is based on the OECD tax reform project, whereby the OECD’s so-called “pillar 2” on a global minimum tax will be incorporated. Under the regulations, companies with annual total sales in excess of EUR 750 million will be liable for the global minimum tax of 15%.
The Swedish Bar Association believes that the regulations are important in the work to reduce large companies’ ability to evade taxes and decrease harmful tax competition between countries. The introduction of a global minimum tax is basically appropriate and is an important first step in the reform of the international corporate taxation system.
However, the consultation response notes that certain challenges exist due to the complexity of the regulations, particular with regard to legal certainty and predictability of taxation. According to the set time schedule, the Directive must be implemented as early as 1 January 2023. The Swedish Bar Association fears that the planned time schedule provides insufficient time for companies to adopt necessary measures in line with the Directive.
Furthermore, the Swedish Bar Association considers that implementing a first version of the EU legislation before the OECD’s work has been completed entails a risk. The reasons for the OECD’s framework regulations have not been finalised and the comments are only intended to be published this month. That means that there is a possibility that the OECD model rules will be amended or, more likely, made more specific. In order to eliminate the risk of two parallel sets of regulations, EU legislation should enter into force only after the OECD’s work has been completed.
In the consultation response, the Swedish Bar Association therefore calls on the Government to adopt necessary measures to ensure that the EU extends the period of entry into force for the Directive and that a thorough review of the Directive takes place in order to increase predictability and legal certainty for Swedish taxpayers.
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