Sweden: Refunds of withholding tax on dividends to be paid with interest

According to a number of decisions from the Administrative Court of Appeal, interest must be paid on a refund of withholding tax that has been withheld in violation of EU-law. In light of these decisions, the Swedish Tax Agency (STA) has published a statement regarding interest on withholding tax refunds (Skatteverkets ställningstagande, dated 29 January 2015, number 131 50823-15/111). According to the statement, interest shall be paid on the refund of withholding tax regardless of the reason for repayment.

Where the withholding tax has not yet been repaid, interest will be paid from the day after filing the tax reclaim until the day the withholding tax is repaid.

If withholding tax has already been repaid, interest will be paid on application and will also be paid from the day after filing the tax reclaim until the day the withholding tax was repaid. An application for payment of interest must be filed with the STA by the end of the fifth calendar year following the year that the dividend was paid.

The interest will be computed with the base interest rate laid down by the STA. The rate changes from year to year and has ranged between 0% and 2% for the last five years.

For more details please refer to the Swedish Tax Authority website.