Ten years of declining tax rates for Swedish companies

During the last ten years, the total tax pressure on companies in Sweden has been decreasing steadily to 49 percent (down from 54 percent in 2004). This year’s issue of “Paying Taxes” shows a similar trend even for the rest of the Nordic Region. “Paying Taxes” is a joint report produced by PwC and the World Bank Group with the aim of comparing the tax systems in 189 countries around the world by ranking them according to a case study company.

Tax pressure

Sweden has a total corporate tax rate of 49.1 percent, which is in excess of the tax rate for both the other Nordic countries and the average global total tax rate (40.8 percent). A comparison between the Nordic countries also shows that Sweden has historically had the highest total tax rate during the last ten years. The comparison is even more interesting if one looks closer at the relation of the various taxes comprising the total tax rate.

Of Sweden’s total tax rate of 49.1 percent, tax on labour comprises 35.4 percentage points. The portion of tax on labour in relation to total tax is, in other words, 72.1 percent, which is high with a global comparison.

The study also shows that an unbalanced taxation of labour can potentially imply a risk of negative effects on a country’s economic growth, as well as on employment.