Sweden Proposes Amendments to Interest Deduction Rules to Align with EU Law

The Swedish Ministry of Finance has published a draft bill that includes targeted amendments to the Income Tax Act regarding interest deduction rules to ensure compliance with EU law. The amendments are in response to recent rulings by the EU Court of Justice, notably in the Lexel (C-484/19) and X BV (C-585/22) cases, which found Sweden's existing interest deduction limitations incompatible with the EU's principle of freedom of establishment. The draft bill introduces a new anti-abuse provis…