The Swedish Bar expresses its concern in its response to the consultation
The Swedish Bar expresses its concern in its response to the consultation at the forced introduction of a global minimum tax – without impact studies, legal certainty for taxpayers is at stake
Lindahl Law Firm participated in the work of the Swedish Bar Association to produce a consultation response to the European Commission’s proposal for a Council Directive on a comprehensive minimum tax for multinational companies in the EU. The response to the consultation was published on the government website on February 4, 2022. See the response to the consultation here (in Swedish).
The directive is based on the OECD’s tax reform project, in which the OECD’s “pillar 2” on a global minimum tax will be integrated. Under the regulations, companies whose total annual turnover exceeds €750 million will be liable for the overall minimum tax of 15%.
The Swedish Bar Association believes that regulations are important in working to reduce the ability of large companies to evade tax and reduce harmful tax competition between countries. The introduction of a global minimum tax is fundamentally appropriate and an important first step in reforming the international corporate tax system.
However, the response to the consultation notes that certain challenges exist due to the complexity of the regulations, in particular with regard to legal certainty and the predictability of taxation. According to the timetable set, the directive is to be implemented as of January 1, 2023. The Swedish Bar Association is concerned that the timetable provided gives companies enough time to adopt the necessary measures in accordance with the directive.
In addition, the Swedish Bar Association considers the implementation of a first version of EU legislation before the end of the work of the OECD to be risky. The reasons for the OECD Framework Regulations have not been finalized and comments are not expected to be released until this month. This means that it is possible that the OECD model rules will be modified or, more likely, made more precise. In order to eliminate the risk of two sets of parallel regulations, EU legislation should only come into force after the work of the OECD has been completed.
In the response to the consultation, the Swedish Bar Association therefore calls on the government to adopt the necessary measures to ensure that the EU extends the period of entry into force of the directive and that a thorough review of the directive has place in order to increase predictability and legal protection certainty for Swedish taxpayers.