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Sweden: Amended Rules on Tax Deferral

(Dec. 3, 2009) The Swedish Parliament enacted a bill on November 25, 2009, that amends and liberalizes existing law on the tax applied to individuals in cases of exchange of shares. The new rules, adopted as Prop. 2009/2010:24, will come into force on January 1, 2010. (Emma Nilsson, Rules on Tax Deferral for Individuals Amended, IBFD TAX NEWS SERVICE, Dec. 1, 2009, via email from [email protected].)

Capital gains from exchanges of shares for shares in an acquired company have been eligible for a tax deferral until the new shares are sold or until the shareholder ends residence in Sweden. Under the amended rules, the shareholder may still be eligible for the deferral of taxes even after leaving the country, if that shareholder moves to another European Economic Area (EEA) country. In addition, the deferral will be available to those shareholders resident in other EEA countries at the time of the share exchange, if that shareholder was a resident of Sweden at some time in the year of the exchange of shares or in the ten preceding years. (Id.)

The EEA comprises countries that are members of the European Union or the European Trade Association. It includes Iceland, Liechtenstein, and Norway, which are not members of the European Union. (European Economic Area, European Commission website, (last visited Dec. 3, 2009).)