On March 27, 2017, Sweden issued updated guidance on transfer pricing documentation (i.e., master and local file) requirements. See Chapter 39 of the Tax Procedures Act, as well as Transfer Pricing Regulation 2007:25 and Transfer Pricing Regulation 2007:01B.
The new rules are aligned with OECD BEPS Action 13 and will enter into force on April 1, 2017, applying to fiscal years beginning after March 31, 2017. Small and medium enterprises are exempt from the documentation requirements (i.e., less than 250 employees and either an annual turnover not exceeding SEK 450 million or a balance sheet total not exceeding SEK 400 million during the prior tax year).
The documentation should consist of two components: (i) Group or corporate portion and (ii) company-specific part. The corporate portion should include a review of the group and its activities, and should be completed by the time the parent company submits its tax return.
The corporate part will include information on the following:
- General description of the group's operations or activities.
- Intangible assets.
- Intra-group financial activities.
- Financial information and information about tax-related agreements.
The company-specific part of the documentation should contain information about the company and cross-border transactions. The company-specific part must be completed when the Swedish company submits its income tax return.
The company-specific part must include information on the following:
- Company structure.
- Major transactions.
- Financial information.
Transfer pricing documentation must be completed in Swedish, Danish, Norwegian or English, and must be submitted to the tax authorities upon request.