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Sweden Announces 2018 Budget Measures

by Ulrika Lomas,, Brussels

25 September 2017

The Swedish Government has announced a number of tax measures in the Budget for 2018, including new rules for employee stock options and corporate interest deductions.

Presented on September 18, the budget includes proposals foreshadowed by the Government in recent weeks which are intended to relieve the tax burden on small companies and those starting a business.

Under these proposals, less onerous tax rules will apply to remuneration in the form of stock options to help start-up firms struggling to meet prevailing wages to attract skilled workers. The changes will mean that the employee will not be taxed when the employee stock option is exercised. Instead, taxation will occur when the share purchased by the employee using the stock option is sold. The proceeds would then be treated as a capital gain for tax purposes.

In addition, to encourage more people to start businesses, the availability of reduced employer contributions for the hiring of a company's first employee will be expanded.

Changes to the corporate interest deduction were also included in the Budget. According to the Government, these measures are intended to "improve neutrality between financing with equity capital and debt capital as well as counteract tax planning using interest deductions."

Another previously announced measure included in the 2018 Budget is the elimination of the advertising tax paid by the print media. Intended to enable traditional newspapers to better compete with online news sources and combat "fake news," this would see the 2.5 percent tax on advertising revenues abolished in January 2018.

The Budget also contains a new air travel tax, under which a charge of SEK80 (USD10) will be added to the price of domestic flights and flights with destinations in the EU, and a charge of SEK430 will apply to long-haul travel.

TAGS: tax | business | interest | budget | corporation tax | tax planning | Sweden

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