Sweden: Withholding tax on foreign public pension institutions held contrary to EU law (CJEU judgment)
A CJEU judgment concerning withholding tax on foreign public pension institutions.
A CJEU judgment concerning withholding tax on foreign public pension institutions.
The Court of Justice of the European Union (CJEU) on July 29, 2024, held that the Swedish withholding tax on dividends to foreign public pension institutions, while Swedish public pension institutions are tax-exempt, is contrary to EU law as it violates the free movement of capital.
The case identifying information is: Keva and Others (C-39/23).
The court found that the different treatment of foreign institutions could not be justified by an overriding public interest reason.
KPMG observation
Foreign public pension institutions and other similar public investors can now apply for a refund of Swedish withholding tax.
Sweden may introduce a “sovereign exemption” for foreign states to make certain that Swedish legislation is compatible with the free movement of capital under EU law.
Read a July 2024 report prepared by the KPMG member firm in Sweden
Read an August 2024 report prepared by the KPMG EU Tax Centre
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.