Sweden: Bank tax measure, reduced energy tax for farmers in spring budget
The spring budget does not include significant tax proposals.
Reduced energy tax for farmers in spring budget
The government today, 19 April 2022, presented its spring budget.
The spring budget does not include significant tax proposals, but it does include measures concerning the risk tax for credit institutions (the “bank tax”) as well as proposals to reduce the energy tax with regard to energy used in certain water, soil, and forestry operations.
Bank tax implications
The government used the spring budget as an opportunity to address an announcement from the Riksdag (the Parliament) regarding the risk tax for credit institutions—the “bank tax.”
The bank tax is imposed on the debt of credit institutions—hence, a “risk tax” (riskskatt). The tax applies for banks and other credit institutions that are part of groups with total liabilities attributable to operations in Sweden exceeding SEK 150 billion for 2021. The tax basis is the amount of liabilities (with certain exceptions) generally referred to as a “simplified indebtedness.” Read TaxNewsFlash
In accordance with the announcement from the Riksdag, municipalities and regions would be compensated for their increased costs for financing, due to Kommuninvest* being affected by the bank tax. The Riksdag also had requested that the government propose a bill that would exempt Kommuninvest from the bank tax. In the spring budget, the government announced that such a proposal is being prepared.
*Kommuninvest is a Swedish local government funding agency that aims to help municipal governments raise capital through the issuance of bonds in Europe and other countries.
Energy tax relief for farmers
In February 2022, the government announced SEK 300 million in temporary relief to support agriculture in the form of a reduced energy tax. In the spring budget, the government presented bills that would implement these reduced energy tax measures.
The proposal to reduce the energy tax has been formulated as an addition to a current exemption from the carbon dioxide tax—an exemption that applies to fuel that is used or consumed in aquaculture, agriculture or forestry activities. A prerequisite for being able to benefit from the exemption is that the fuel must be used in the operations of ships, certain boats, and motor vehicles (other than cars, trucks and buses).
Aquaculture, agriculture, and forestry farmers already benefiting from the carbon dioxide tax exemption would qualify for the new energy tax exemption.
- The scope of the new energy tax exemption is initially proposed to apply from 1 July to 1 October 2022, as SEK 1,061 per cubic meter of fuel. The amount would then increase to 2,111 per cubic meter until 1 July 2023. Thereafter, the energy tax exemption would be terminated.
- At the same time as the temporary support would be withdrawn, the government proposes that the carbon tax exemption be reduced, from the current level of SEK 2,292 per cubic meter to SEK 1,930 per cubic meter.
Read an April 2022 report (Swedish) prepared by the KPMG member firm in Sweden
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.