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European Commission - Press release

Taxation: The European Commission requests Sweden to stop discrimination against foreign pension funds

Brussels, 22 March 2012 – The European Commission has officially asked Sweden to amend its tax rules on pension funds. The Swedish legislation at stake discriminates against non-resident pension funds compared to domestic pension funds when it comes to taxing dividends distributed in Sweden.

Dividends paid to foreign pension funds by Swedish companies are subject to a withholding tax without any deduction possibilities. Dividends paid to domestic pension funds in Sweden are not subject to withholding tax. The funds in question are subject to a specific tax based on a notional calculation of their yield and have the possibility to deduct costs. As a result of this system, the tax rate on dividends received by resident pension funds will often be lower than for non-resident funds. The Commission considers this to be discriminatory against non-resident pension funds and to be contrary to EU rules on the free movement of capital. In addition, it can deter non-resident pension funds from investing in Sweden.

The request takes the form of an additional reasoned opinion (the second stage of an infringement procedure). If the rules are not brought into compliance within two months, the Commission may refer the matter to the Court of Justice of the European Union.


According to Swedish legislation, non-resident pension funds are subject to domestic withholding tax on dividends. The withholding tax rate amounts to 30%. This may be reduced to 15% as a result of Swedish double tax conventions.

Resident pension funds are exempt from the withholding tax on dividends as well as from corporation tax. They are subject to a 15% tax on their yield. The taxable base for this tax is not based on actual profits but on a notional calculation with the possibility to deduct costs.

As a result of this system, the effective tax rate on dividends received by resident pension funds will frequently be lower than the 15% tax rate that is applied to non-resident pension funds.

The first reasoned opinion was sent on 28 October 2010 (see IP/10/1406).

For the press releases issued on infringement proceedings in the area of taxation or customs see :

For more information on EU infringement procedures, see MEMO/12/200

For the most up-to-date general information on the infringement proceedings initiated against Member States, see:

Contacts :

Emer Traynor (+32 2 292 15 48)

Natasja Bohez Rubiano (+32 2 296 64 70)

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