Swedish court confirms arm’s-length principle for intercompany loans
July 15, 2009
The Swedish Administrative Court of Appeal has upheld a lower court decision clarifying the determination of the arm’s-length interest rate for intercompany loans in a case involving one of the country’s largest real estate companies.
New rules relating to intercompany loans were introduced in 2008, since then the Swedish National Tax Authority has paid closer attention to such arrangements. Now, a court ruling has determined that the arm’s-length interest rate for an intercompany loan should be determined based on the credit rating of the borrower, the presence or lack of collateral, the term of the loan, the currency in which the loan is denominated, and the loan type.
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