Swedish Parliament Approves Legislation to Reduce the Corporate Tax Rate and Introduce New Interest Deduction Restrictions

On 14 June 2018, Sweden's parliament approved legislation for the introduction of new tax rules for the business sector. This includes:

• A reduction in the corporate tax rate from 22% to 21.4% in 2019 and 2020, and to 20.6% from 2021;
• A new EBITDA-based interest deduction restriction, including:
  • A general deduction restriction on negative net interest expense equal to 30% of EBITDA;
  • A safe harbor net interest deduction up to SEK 5 million, which applies at the group level;
  • Allowed carry-forw…