TAX PROSPECTS IN SWEDEN AND NORWAY

Predicting the future is always difficult, and forecasts rarely prove entirely accurate. Still, the exercise is a valuable one, as thinking through what may lie ahead leaves one better prepared. What follows is Mats’ thoughts on what will happen in the field of tax following the recent general election in Sweden, and Hugo's view on the prospects for a broad tax settlement in Norway following the Tax Commission's report.

The general election (i.e. elections to the Parliament, municipalities and regions) held in Sweden on 13 September resulted in the incumbent non-socialist government losing its majority in Parliament. The leader of the Social Democrats, Magdalena Andersson, was the first to be given the task of forming a new government. The general view is that this will be extremely complicated, not least because of the "red lines" between the parties that would form the basis for a government led by Andersson. Given the pre-election campaign positions, those parties would be the Social Democrats, the Green Party, the Centre Party and the Left Party. The Left Party has made clear that it will not support any government in which it does not have a seat. The Centre Party has made equally clear that it will not accept a government in which the Left Party has a seat. Andersson's difficulty is that she needs at least passive support from both parties to form a government, as the prospect of any party from the incumbent coalition breaking ranks to support her appears unlikely.

Whilst it is difficult to foresee what the new government will look like, it is no less difficult to predict its tax policies. One may, however, allow oneself some speculation. The Swedish inheritance and gift tax was abolished by the Social Democrats in 2005, and the net wealth tax was abolished by a right-wing coalition in 2007. It should be noted that the Left Party has said it wishes to introduce a form of net wealth tax, which it labels a "billionaire tax". The party holds around eight per cent of the seats in Parliament and no other party has expressed support for this proposal. It therefore seems unlikely that either of these taxes would be reintroduced in any form.

Perhaps more likely is the introduction of a higher tax on banks. The Green Party and the Left Party are in favour of this, whilst the Social Democrats expressed before the election a desire to introduce a temporary tax on banks. The Centre Party's position on this issue is not entirely clear. This means that, if a government led by the Social Democrats is formed, it is not unlikely that a bank tax proposal will be put before Parliament. Those opposed argue that a tax of the type discussed, an additional tax on net interest income, would in practice not affect the banks, as they would pass the cost on to their customers, typically individuals with mortgage loans.

It is also unclear whether there will be any proposals regarding income tax on individuals. The Social Democrats, the Green Party and the Left Party all favour increased taxes on labour income, particularly in the higher brackets, whilst the Centre Party is firmly opposed to such increases. There are also taxes in respect of which uncertainty is linked more to external factors than to differences of opinion between the parties. This is true of fuel tax and VAT on groceries, both of which Sweden has temporarily reduced. It is unclear what will happen with these taxes. Little was said about corporate tax during the election campaign. The current government has put forward proposals which, if enacted, would lead to more favourable tax treatment of R&D (as further elaborated on in this Newsletter). It is not clear whether a new government would reverse these proposals.

To summarise, and it must be emphasised that this is guesswork given the uncertain situation in Parliament, an attempt to foresee what will happen to certain taxes in Sweden in the near future would look as follows:

• Reintroduction of inheritance and gift tax — not likely.
• Reintroduction of net wealth tax — not likely.
• Introduction of a temporary bank tax — not unlikely.
• Increased tax on labour income — not unlikely, at least on income in the higher brackets.
  

Norway appears for the time being to be in a quieter period regarding taxation, compared to Sweden.

The Norwegian government has taken initiative for a broad political tax settlement and appointed a tax commission. The commission, chaired by Eigil Knutsen, has delivered a report, NOU 2026: 9, titled “The Path to a Better and More Predictable Tax System” (No: “Veien mot et bedre og mer forutsigbart skattesystem”). The Tax Commission's proposals have been out for consultation, with a three-month consultation deadline that expired on 24 September 2026. The government is expected to present a white paper (No: “stortingsmelding”) to the Parliament (No: “Stortinget”) in early 2027, which will form the basis for negotiations on a broad tax settlement in Stortinget in the spring of 2027. If the parties reach an agreement, implementation could begin as early as the 2028 state budget. It will be interesting to see whether the government will nonetheless take the commission's signals and address some of the most unfortunate aspects of the current tax system already in the budget for 2027, due on 7 October 2026 — for example, proposed changes to the Norwegian exit tax and stock option schemes.

The Tax Commission's main proposals relate, among other things, to an adjusted wealth tax, a reduced tax rate on distributions under the exit tax, a tightening of housing taxation, reduced tax on wages and pensions, and increased VAT. For stock options, it is proposed that the special scheme for start-ups and growth companies be expanded to match the Swedish model, with an increased threshold for operating revenue and balance sheet total. Read more about the exit tax reform in our article here.

Based on the formal process, it is unlikely that the state budget presented on 7 October 2026 will contain finalised legislative proposals directly following up on NOU 2026: 9. The more realistic scenario is that the Ministry of Finance will, in the budget documents, comment on the status of the consultation process and possibly announce certain specific measures that do not require a broad settlement among the political parties. For example, within the exit tax or stock option taxation, which could be candidates for earlier follow-up. Another change in the tax legislation that may occur in the state budget, is a potential introduction of taxation (on negative cost base) upon the transfer of shares to non-personal legal entities, such as holding companies of donor's children. The general tax reform is expected to be addressed through a separate white paper in 2027.

There is significant disagreement among the political parties regarding the choice of solutions. Following the formal process, it remains to be seen whether the politicians can reach an agreement on a tax reform.