Sweden: Tax agency clarifies input tax deduction on sale of subsidiary shares
The Swedish Tax Agency, in Statement No. 8-2592117, has provided clarification regarding the Supreme Administrative Court’s ruling in Case No. 1041-1043-22, which pertains to the deduction of input tax in connection with the sale of shares in subsidiaries.
In this case, the taxpayer, a holding company, sought to deduct input tax for expenses linked to the sale of shares in one of its subsidiaries. Notably, the taxpayer had provided taxable services to the subsidiary, and the sale of shares was categorized as an exempt transaction occurring within the framework of its economic operations.
The Supreme Administrative Court’s decision affirmed that the costs associated with the sale of shares had a direct and immediate connection with the company’s economic activities, satisfying the necessary criteria for input tax deduction. Importantly, the Tax Agency emphasized that when a holding company engages in exempt transactions or non-economic activities, the deduction of input tax on general expenses is permissible only in relation to taxable transactions.
Source: skatteverket.se
