Sweden to Cut Corporate Tax

September 14, 2012 Taxation in Sweeden

Prime Minister of Sweden Fredrik ReinfeldtSTOCKHOLM – Sweden is cutting taxes and launching new economic initiatives in order to stimulate growth of the national economy.

At a press conference held in Stockholm on September 13th the Prime Minister of Sweden Fredrik Reinfeldt announced that in 2013 the government will slash the corporate tax rate from the current level of 26.3 percent to 22 percent.

Explaining why the government is opting to cut corporate taxes first, the Prime Minister said “…corporate taxes are probably the most damaging tax of all.”

In August the government vowed to spend nearly SEK 22 billion on new initiatives  to stimulate economic growth and reduce the rate of unemployment in Sweden, and the new tax cut will account for approximately SEK 16 billion of the available funds.

Approximately SEK 8.8 billion of the costs of cutting the tax rate will be offset by a reduction in the deduction allowance for corporate interest payments.

Alongside the tax cuts, the government also announced a SEK 200 000 tax break for all individuals investing into start up companies or providing new financing to an already operating company.

In addition to the tax cuts, the Prime Minister also announced several economic programs to boost the economy, include investments into the national roading and railway systems, the launch of new programs to curb the rate of youth unemployment, and increase spending into the research and development sector.

Photo by centerbilder