Chapter 33a of the Swedish Tax Procedure Act (Skatteförfarandelagen 2011:1244) deals with country-by-country reporting for large multinational enterprise groups. This chapter implements the EU directive adopted in 2016 on country-by-country reporting, which is based on the OECD’s BEPS Action 13.Key points about Chapter 33a include:

1. It establishes rules for qualified country-by-country reports.
2. The reports should be prepared in accordance with OECD standards and recommendations.
3. Special attention is given to future developments at the OECD level when interpreting and applying these rules.

The 2024 update to the OECD guidance clarifies how to handle intra-group payments reported as dividends in qualified financial reports. Specifically:

• Data in qualified financial reports should not be adjusted based on tax treatment.
• Intra-group payments included in profit before tax for the recipient and as an expense for the payer in their qualified financial reports should be included in the revenue and profit before tax for the recipient, regardless of tax treatment.
• Only when a payment is accounted for as a dividend in the payer’s qualified financial report should it be excluded from the recipient’s revenue and profit before tax in Safe Harbour calculations.

These provisions aim to ensure consistency and transparency in financial reporting for large multinational groups operating in Sweden.

Country by Country Reporting

Chapter 33a of the Swedish Tax Procedure Act (Skatteförfarandelagen 2011:1244) is directly related to country-by-country (CbC) reporting for large multinational enterprise (MNE) groups. This chapter implements the EU directive on CbC reporting adopted in 2016, which is based on the OECD’s BEPS Action 13. Key aspects of the relationship between Chapter 33a and CbC reporting include:

1. Reporting requirements: The chapter establishes rules for qualified CbC reports, which must be prepared in accordance with OECD standards and recommendations.
2. Scope: It applies to MNE groups with an annual total consolidated income of €750 million or more over the immediately preceding fiscal year.
3. Implementation of international standards: The Swedish legislation aligns with the OECD guidelines, ensuring consistency with global CbC reporting practices.
4. Reporting format: CbC reports must be submitted in XML format, following OECD instructions, to facilitate validation and exchange between countries.
5. Information content: The reports include aggregate information on revenue, profit before income tax, income tax paid and accrued, stated capital, accumulated earnings, number of employees, and tangible assets for each jurisdiction where the MNE group operates.
6. Reporting entity: The ultimate parent entity or, in some cases, a surrogate parent entity is responsible for submitting the CbC report.
7. Use of information: The Swedish Tax Agency (Skatteverket) uses CbC reports for assessing high-level transfer pricing risks and other BEPS-related risks.
8. Confidentiality and data protection: The chapter ensures that CbC information is exchanged securely between tax authorities and used only for specified purposes.

By incorporating CbC reporting requirements into the Tax Procedure Act, Sweden ensures compliance with international standards and facilitates the exchange of tax-related information among jurisdictions to combat base erosion and profit shifting.