Sweden: Draft legislation exempting foreign states and municipalities from withholding tax
Exemption would apply July 1, 2026.
The Swedish government on June 9, 2025, released for public consultation draft legislation that would exempt foreign sovereign states and equivalents to Swedish municipalities and regions from withholding tax on dividends, effective July 1, 2026.
This follows the Court of Justice of the European Union (CJEU) decision in Keva, which found the Swedish withholding tax on foreign public pension funds contrary to the free movement of capital.
The exemption would apply to states within the European Economic Area (EEA) or that have an agreement with Sweden about exchange of information in tax matters, and to equivalents municipalities and regions in such states.
For more information, contact a KPMG tax professional in Sweden:
Johanna Ahlstedt | johanna.ahlstedt@kpmg.se