The impact of BEPS on Swedish companies

The OECD’s final reports regarding BEPS are extensive and contain more than 1,600 pages of analysis and recommendations. How these recommendations will, in practice, impact companies is currently uncertain but PwC has produced a report providing guidance regarding the various Actions, how these are expected to impact Swedish legislation and, not the least, how they will impact Swedish companies.

Certain of BEPS Actions will have, in practice, an immediate effect, primarily, as regards transfer pricing and documentation requirements. Developments in terms of the other Actions will, most likely, take a number of years due to the fact that the recommendations must be introduced into the respective countries’ domestic tax legislation.

We believe that companies should primarily focus on the following tax areas:

• make an inventory of existing hybrid instruments and similar arrangements within the Group
• review the current financing structures with the aim of identifying debt that risks being covered by the proposed limitation rules
• analyse whether the proposals regarding the change in the definition of permanent establishment would impact the Group’s business model
• review the company’s transfer pricing policy in the context of BEPS
• update transfer pricing documentation

BEPS represents the most extensive change in the international tax area in many years and we have, to date, seen just the beginning of the work with these changes. PwC can assist you in understanding what has happened and what will happen in these areas.

 Andreas Carlsson, Hanna Nilsson och Pär Magnus Wiséen