Worldwide transfer pricing reference guide 2014

Sweden
Taxing authority and tax law
Taxing authority: The Swedish Tax Agency is responsible for the correct and uniform implementation of the tax laws. It issues guidelines,
recommendations and publishes its standpoints on specific issues to the local tax offices.
Tax law:
• Sections 14:19–20 of the Income Tax Act contains the arm’s length principle
• Sections 39:15–16 of the Tax Procedures Act (Sw: Skatteförfarandelagen (2011:1244)) include the documentation requirements
regarding transfer prices
• Advance Pricing Agreements Act (Sw: Lag (2009:1289) om prissättningsbesked vid internationella transaktioner)
Relevant regulations and rulings
The Swedish Tax Agency has issued regulations (SKVFS 2007:1) regarding documentation of the pricing between associated enterprises.
The Swedish Tax Agency also continuously issues general taxation guidelines and opinions, which include information on transfer pricing.
OECD Guidelines treatment
The Swedish tax laws on transfer pricing refer to the OECD Guidelines, and the OECD Guidelines are applied by the courts and tax
authorities.
Chapter IX of the OECD Guidelines (on Business Restructurings) has significantly increased the Swedish Tax Agency’s focus on
restructurings.
Priorities/pricing methods
One of the methods described in OECD Guidelines should be applied. Transaction-based methods are, all things being equal, preferred
over profit-based methods.
Transfer pricing penalties
There are no specific transfer pricing penalties in Sweden; however general penalty rules apply, with penalties ranging from 10% to 40%
of the additional tax imposed. In transfer pricing cases, penalties at a rate of 40% are generally imposed.
Penalty relief
Penalties are imposed on taxpayers for supplying the Swedish Tax Agency with inaccurate or insufficient information. In the preparatory
work to the law that introduced transfer pricing documentation requirements, it is stated that if an income adjustment is made because
the taxpayer’s prices are not deemed to be at arm’s length; the penalties might be reduced or eliminated if the taxpayer has prepared
proper transfer pricing documentation.
Documentation requirements
Multinational enterprises are required to document transactions with related companies.
The documentation shall include:
• A description of the company, organization and business operations
• Information regarding the characteristics and scope of the transactions
• A functional analysis
• A description of the chosen pricing method
• A comparability analysis
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