A New Era: Public Country-by-Country Reporting in Sweden

For large multinational companies with a calendar-based fiscal year and a turnover exceeding 8 billion Swedish kronor over the past two years, 2025 will be the first year for Swedish public country-by-country reporting (pCbCR). The regulation was adopted by the European Parliament in 2021, and the Swedish law came into effect on June 22, 2023, applying to fiscal years starting after May 31, 2024. The purpose of pCbCR is to increase transparency and accountability regarding taxes for companies operating within the EU.

The EU's introduction of pCbCR, which requires the public disclosure of key financial data in the group's operating countries in an income tax report, represents a significant shift in corporate transparency and tax accountability. The aim is to provide a broader group of stakeholders with a clearer picture of the economic activities and tax contributions of multinational groups within the EU.

The EU directive is being implemented into the national legislation of EU member states, which means that several local differences need to be considered. Sweden's rules apply to fiscal years starting after May 31, 2024. For companies with a calendar-based fiscal year, 2025 will be the first reporting year, meaning that the report must be submitted to the Swedish Companies Registration Office (Bolagsverket) and published on the company's website by December 31, 2026.

Scope of the Rules

The pCbCR rules apply to multinational groups where either the parent company is situated within the EU or where there are subsidiaries or branches of significant size within the EU. Provided that the parent company, subsidiary, or branch is in Sweden, the Swedish reporting obligation arises when the revenue of either the group or the company exceed 8 billion Swedish kronor in both of the two most recent fiscal years.

Reporting obligations apply to Swedish subsidiaries with parent companies outside the EEA only if the subsidiary is a limited company (aktiebolag) or partnership (handelsbolag). It must also meet at least two of the following criteria: turnover over 80 million Swedish kronor, balance sheet total over 40 million Swedish kronor, or more than 50 employees. For branches of companies outside the EEA, the branch must have a net turnover of over 80 million Swedish kronor during the same period. If an income tax report is already available and has been published, the subsidiary does not need to prepare a report.

Income Tax Report - Content and Filing

The first income tax report should cover the latter of the two fiscal years that a group exceeds the revenue threshold and must be submitted no later than twelve months after the end of the reportable year. This means that a group with a calendar-based fiscal year that exceeds the revenue threshold in 2024 and 2025 will be required to report for the first time for the year 2025. The income tax report must be submitted to the Swedish Companies Registration Office (Bolagsverket) and made available on the company's website by December 31, 2026.

In addition to the group's or company's name, current fiscal year, and currency, the income tax report must include:

• Information related to the business activities
• Number of employees
• Revenues
• Profit or loss before income tax
• Accumulated income tax for the year
• Paid income tax
• Accumulated retained earnings for the year

The income tax report must be available for at least five years. The information in a pCbC report must be provided separately for each EU member state where the group operates and for each jurisdiction considered non-cooperative by the EU or that has been on the EU's "grey" list for at least two years. Information concerning all other jurisdictions can be reported on an aggregated level.

Possibility of Deferring Information Disclosure for Up to Five Years

It is possible to temporarily omit information from an income tax report if disclosure would harm the group's commercial position. However, the deferral is limited to a maximum of five years and must be justified in the report. Information about non-cooperative jurisdictions on the EU's list can never be omitted. Failure to disclose deferred information within five years, or to submit a report at all, maylead to fines.

Differences from Regular CbCR

There are some differences between "regular" CbCR based on OECD rules and pCbCR based on an EU directive. Regular CbCR requires only that the threshold of 7 billion Swedish kronor is exceeded in one year, compared to pCbCR, which requires that 8 billion Swedish kronor is exceeded in two consecutive years.

The content of pCbCR is more limited and does not require, for example, that revenues from independent and related parties be reported separately, only the total turnover. PCbCR also does not require information on share capital and tangible assets, which is required in "regular" CbCR. There is currently no pCbCR Notification filing requirement in place. 

Concluding Remarks

For companies with revenues above the thresholds for pCbCR, it is important to carefully review and compile relevant data in time. The difference between reporting information to tax authorities compared to the public means that additional explanations may be needed to avoid misunderstandings, as the public constitutes a different type of reader. The public income tax report requires accurate and consistent presentation of information to avoid risking public trust. To avoid misunderstandings, it may sometimes be beneficial to supplement the published information with additional explanations and contextualization of the content in the income tax report, even though such a requirement does not follow from the legislation.

PwC offers support in preparing reports and developing strategies for tax transparency. Adapting to increased public transparency requires careful consideration of what is communicated to the public. Contact Emelie Kokkinakis, Amanda Ivansson and Elin Dyberg for questions.

Don't miss PwC's 'EU Public Country-by-Country Reporting Tracker' where you can follow the development of pCbCR in the 27 EU member states. Also, see our previous article on Romania, which was the first EU member state to formally introduce the rules for fiscal years starting January 1, 2023, and later. Australia has also recently introduced its own rules regarding pCbCR, see further reading here.