Swedish Parliament Approves Withholding Tax Exemption on Dividends Paid to Foreign States

On 20 May 2026, the Swedish Riksdag (parliament) approved legislation that provides a withholding tax exemption on dividends paid to foreign states and foreign equivalents of a Swedish region, municipality, or municipal association (subdivision). The exemption is being provided due to the finding that Sweden's current rules violate the free movement of capital in regard to the payment of dividends to public pension funds, which are currently exempt when paid to Swedish funds, and subject to …