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HMRC internal manual

Double Taxation Relief Manual

Sweden: Dividends

The Swedish tax on dividends (Kupongsskatt) is limited to 5 per cent (nil if the beneficial owner is a United Kingdom company controlling, directly or indirectly, at least 10 per cent of the voting power in the Swedish company) (Article 10(1)).

The above reductions are not given where the dividends are effectively connected with (see INTM153110 fifth sub-paragraph) a permanent establishment or fixed base which the United Kingdom resident recipient has in Sweden. This tax qualifies for credit as a direct tax (see INTM164010 (c)).

Where a dividend is paid to a United Kingdom company which controls, directly or indirectly, not less than one-tenth of the voting power in the Swedish company, credit is also due for the underlying tax (see INTM164010 (d)) (Article 22(1)(b)).

The exemption from withholding tax would apply without reference to the double taxation agreement under the EU Parent-Subsidiary Directive where the minimum shareholding is 15 per cent (10 per cent from 1 January 2009).