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The Ministry of Finance introduces amendments to the proposal to introduce a new Risk Tax for larger banks and credit institutions 

Tax Alert 

Published: 2021-05-31

On September 17, 2020, a memorandum with a proposal to introduce a new tax for larger banks and other credit institutions was introduced by the Ministry of Finance. On May 24, 2021, the Ministry of Finance introduced an amended proposal.

The memorandum introduced on September 17 2020 was commented by Deloitte in a Tax Alert "Risk Tax for larger banks and other credit institutions". 

The proposal is based on the view that larger banks and credit institutions (Sw. kreditinstitut) can cause essential indirect costs for the society in case of a financial crisis. The Ministry of Finance therefore proposes to introduce a Risk Tax for larger banks and other credit institutions with a debt exceeding a certain threshold. The threshold is proposed to be SEK 150 billion for financial years commencing in 2022. For financial years commencing on or after January 1 2023 the threshold is suggested to be reassessed yearly, to be set at SEK 150 billion multiplied by a number expressing the ratio of the change of the price base amount (Sw. prisbasbelopp) between 2022 and the year the current financial year is commencing in percentage with the addition of two percentage points. The threshold value should be rounded down to the nearest billion SEK.

If the proposal is enacted the tax will be effective on financial years commencing on or after 2022.

The criticism received in respect of the proposal resulted in certain amendments to the proposal that were introduced by the Ministry of Finance on May 24, 2021. 

The amendments to the proposal

For Swedish banks and credit institutions, all debts at the opening of the financial year attributable to the business, i.e. debts related to both the Swedish business and foreign branches, is suggested to be included in the assessment of the total debt. 

In respect of foreign credit institutions, no changes have been made to the proposal. Thus, only debts attributable to the business performed in Sweden should be included in the assessment of the total debt.

The increase of the tax base to cover debt in foreign branches has resulted in amendments to the proposal to decrease the tax rate to 0.05 percent for financial years commencing during 2022 and to 0.06 percent for financial years commencing on or after January 1, 2023.

The Ministry of Finance also suggests to introduce additional amendments to the proposal in respect of the Foreign Tax Credit Act.

The Ministry of Finance is of the view that the proposed risk tax does not constitute state aid but intends to report the proposal to the European Commission to ensure that the proposed rules are in line with the EU state aid rules given the risk of distorting competition on the internal market.

Deloitte’s comment

We note that the tax base in the amended proposal will increase to cover debts in foreign branches. A decrease in the tax rate to 0.05 percent in 2022 and 0.06 percent in 2023 is expected to result in tax revenues of SEK 5 billion in 2022 and an additional SEK 1 billion from 2023 in line with the proposal introduced on September 17, 2020. Furthermore, the proposal is expected to affect 21 credit institutions and 9 groups, which is in line with the proposal introduced on September 17, 2020. Deloitte will continue to assess the proposal of a Risk Tax and its effects for banks and other credit institutions as well as closely monitor the development following the Ministry of Finance’s issued memorandum with the proposal for introduction of a Risk Tax.

Contact us

Anitza Zester
Partner | Tax & Legal
+46 76 827 61 28
azester@deloitte.se

Lars Franck
Partner | Tax & Legal 
+46 73 397 21 26
lfranck@deloitte.se

Sascha Åkerman
Assistant Manager | Tax & Legal
+46 70 080 28 21
sakerman@deloitte.se

Alicia Lihammar
Associate | Tax & Legal 
alihammar@deloitte.se

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