Waiver of shareholder loans

The Supreme Administrative Court has in a recent preliminary ruling concluded that a parent company's waiver of claims on a subsidiary should be considered a non-taxable shareholder contribution for the receiving subsidiary corresponding to the nominal value of the receivables, regardless of the claims' market value.

In the preliminary ruling, a company located in Germany was considering a waiver of its claims on its Swedish subsidiary in the form of a contribution. The question put to the Supreme Administrative court was whether such a contribution should be considered a non-taxable shareholder contribution corresponding to the nominal value and, since the claims' nominal value exceeded their market value, if the waiver entailed any tax consequences for the Swedish subsidiary.

The Supreme Administrative Court stated that the contribution should increase the subsidiary's equity by an amount corresponding to the waiver in its entirety, regardless of the market value of the claims. According to the Supreme Administrative Court's opinion, the parent company's loans to the Swedish subsidiary and the subsequent waiver, must be seen in one and the same context. Further, the court argued that the granting of the loans increased the subsidiary's assets with an amount corresponding to the nominal amount of the claims, and that the waiver of claims would reduce that debt and increase the equity with the same amount. For the Swedish subsidiary, the transaction thereby meant that the company received a contribution from the parent company corresponding to the nominal amount of the claims.