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  • 1.
    Magnusson, Lizette
    et al.
    Jönköping University, Jönköping International Business School, JIBS, Commercial Law.
    Bergman, Therese
    Jönköping University, Jönköping International Business School, JIBS, Commercial Law.
    Begränsningar i avdragsrätten för ränteutgifter: I vilka situationer kan det anses affärsmässigt motiverat att göra ett internt förvärv av delägarrätter?2009Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
    Abstract [en]

    Since the first of January 2009 the Swedish government limited the deductibility of interest expenses on internally funded acquisition of shares between affiliated parties. The purpose of the legislation is to prohibit tax avoidance schemes with interest. In order for the provisions not to prevent business with sound business reasons the legislation grants exemption if the interest income is taxed at a rate of at least 10 percent, according to the laws of the Statute of the company within the community that actually has the right to the income, or if both the acquisition and the debt that is the basis for the interest expenditure is mainly commercially motivated.

    The authors believe that the wording of the provision that allows the deduction of interest expenses, if both the acquisition and the debt underlying the interest expenditure are mainly commercially motivated, is rather vague. The purpose of this master’s thesis is to analyze the circumstances under which an internal acquisition of shares from an affiliated company can be considered as a commercially motivated transaction in order to be granted an exemption from the legislation restricting the tax deductibility of interest expenses.

    To be granted an exemption the affiliated company which request deduction has to show that the internal debt and the acquisition are entered into mainly for sound business purpose in addition to any tax reasons. Acquisition of shares which responds to the need to avoid conflicts of interest and cooperation problems, giving companies an independent management and make them financially independent from each other, achieve diversification and to restructure a business which by their nature or location is distinct from each other, are examples on when an acquisition of shares can be considered as a commercially motivated acquisition of shares. If the reason why a company established itself in a country which has a low tax on interest income is that this country has a legal, financial and politically stable situation, or if the company who receives the interest payment engage in economic activities or the acquisition of shares have occurred earlier, these circumstances indicates that an acquisition is commercially motivated.

    The aim of the thesis is further to investigate whether account has been taken to legal certainty and efficiency aspects in the use of the term business purpose in the legislation restricting the tax deductibility of interest expenses. Since neither the wording of the provision nor the preparatory work gives a clear definition of the circumstances under which an internal acquisition of shares can be considered as commercially motivated the authors conclude that account has not been taken to legal certainty. Since taxpayers have the opportunity to request a preliminary ruling regarding the determination of whether the acquisition of shares is commercially motivated, the authors conclude that this may contribute to a greater legal certainty.

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