The Swedish government's budget bill for 2025

In January 2024, the investigation into the Swedish government's efforts to enhance the competitiveness of Swedish shipping industry presented its memorandum with proposed changes, which we reported on in a previous newsletter. See that article here.

One of the key proposals in the memorandum is the abolition of the stamp duty on shipping mortgages. Currently, the stamp duty for registering ship mortgages is SEK 4 per every SEK 1,000 of the total registered mortgage. The government has now gone forward with the proposal to abolish the stamp duty, as part of the Budget Bill.

The proposed abolition of the stamp duty is set to take effect on 1 July 2025. The government intends to present a more detailed proposal in the spring of 2025.

As reported in our previous newsletter on 19 September 2024 (which can be read here), the government has proposed increasing the portion of a company's tax losses carried forward that can be retained under the amount limit rule (Sw. beloppsspärren) after a change of ownership, from 200% to a maximum of 300% of the total purchase price for the shares.

The purpose of the amount limit rule is to prevent the trading of tax losses. Tax losses carried forward exceeding the limit, are forfeited. The rule typically applies to acquisitions whereby a controlling influence – defined as more than 50% of the total shares or votes – is obtained in a company with tax losses carried forward. 

The proposal to increase the maximum amount from 200% to 300% of the purchase price for the shares reflects the current corporate income tax rate of 20.6%, which is significantly lower than the rate of 28% in place when the rule was first introduced. As a result, the value of any tax losses carried forward is lower at the current corporate income tax rate. An increase of the limit to 300% is considered sufficient to prevent the trading of tax losses. 

The proposed amendments are set to come into effect on 1 January 2025 and will apply on changes of ownership occurring after 31 December 2024.

For electricity-producing properties with windmills, the current property tax is 0.2% of the tax assessment value. For other electricity-producing properties, the property tax is 0.5% of the tax assessment value.

The government has now proposed increasing the property tax on electricity-producing properties with windmills to match the rate of other electricity-producing properties, i.e., 0.5% of the tax assessment value. The objective is to incentivise local municipalities to approve the establishment and construction of windmills.

The proposed changes are set to take effect on 1 January 2026.

The so-called risk tax is paid by credit institutions with debt that exceeds a certain threshold. The threshold is indexed and amounts to SEK 197 billion for financial years starting in 2026. The tax base is the credit institution's total debt, after certain adjustments. Credit institutions with debt exceeding the threshold pays the risk tax on all its debt, while credit institutions not exceeding the threshold pays no risk tax at all. This creates a significant tax threshold effect for credit institutions with debt at or close to the threshold.

To mitigate this threshold effect, the government proposes introducing a base deduction equal to the risk tax threshold of SEK 197 billion. Additionally, to ensure that this base deduction does not negatively impact public finances, the government suggests raising the risk tax rate to offset the potential reduction in tax revenue.

It is proposed that the increased risk tax will come into effect on 1 January 2026, with a more detailed proposal expected from the government during 2025.

As reported in our previous newsletter on 19 September 2024 (which can be read here), the government has proposed that the salary requirement to qualify for expert tax relief should be lowered.

The expert tax relief is available to certain foreign experts, scientists or other key personnel coming to Sweden for work. The purpose is to strengthen the possibilities for Swedish companies to attract and retain international talent, and thereby also the competitiveness of Sweden in the global market. If a person qualifies for expert tax, a portion of that person’s income shall be exempted from the income tax base, resulting in lower tax for the individual as well as for the employing company. Currently, 25% of the expert’s salary is exempted from the income tax base.

To qualify for expert tax relief, the relevant work performed must, apart from being approved by the Swedish Taxation of Research Workers Board, be:

• specialist work for which it is difficult to find competence for within Sweden;
• qualified research and development for which it is difficult to find competence for within Sweden; or
• management positions or similar, which are key roles within a company.

In addition to the qualifications above, an expert shall always be considered qualified if the monthly salary exceeds two price base amounts, i.e., SEK 114,600 for year 2024. This rule was introduced to simplify the process of determining eligibility for expert tax relief, eliminating the need to evaluate other qualifications. Expert tax relief can be applied for a maximum of seven years.

The proposal is to lower the “amount rule” to allow for expert tax relief in situations where the expert’s monthly salary exceeds one and a half price base amount, i.e., SEK 85,950 for year 2024 (approximately SEK 88,200 for year 2025). The proposal is motivated partly by the fact that due to the last years’ experienced inflation, the limit has increased much fast than salaries in general in Sweden. In addition, Sweden’s limit is considered relatively high in comparison to similar amount limits in other European countries.

The proposed amendment shall enter into force on 1 January 2025 and apply to work commencing in Sweden after 31 December 2024.