SWEDEN Law and Practice Contributed by: Christoffer Dahl, Niclas Söderlund, Michel Weimer and Björn Mårtensson, XR Legal
6. Penalties and Sanctions 6.1 Tax Penalties
7.2 Exchange of Information Clauses in Tax Agreements All tax treaties entered into by Sweden, with the exception of the Nordic Tax Treaty where a specific agreement has been entered into that covers the exchange of information, include an article regard - ing the exchange of information. The majority of their articles are based on previous versions of the OECD Model Tax Convention. Sweden does not have any tax treaties supporting the automatic exchange of information. However, it should be noted that automatic exchange of infor - mation has been agreed with the United States in the Sweden–US FATCA agreement. The automatic exchange of information covers financial accounts and country-by-country reporting. 7.3 Other Forms of International Tax Collaboration No additional information has been provided. 8. Mutual Agreement Procedures and Arbitration 8.1 Availability and Legal Basis A taxpayer may request a mutual agreement proce - dure (MAP) from the STA if they believe they are being taxed incorrectly under a tax treaty or taxed twice on the same income in different countries. The STA is the competent authority and negotiates with the for - eign tax authority to resolve the issue based on Article 25 of the OECD Model Tax Convention. The purpose of the MAP is to eliminate double taxation, but tax authorities are not obligated to reach an agreement, unless specific treaty provisions require arbitration. 8.2 Application Deadlines According to most tax treaties, an application for a MAP must be filed within three years from the time the taxpayer became aware of the action causing taxationcontrary to the treaty. Similar time limits apply under the EU Arbitration Convention and EU dispute resolution rules. Applying early is often recommended to avoid limitation periods in the other country.
The STA may impose tax penalties of up to 40% of the unpaid taxes if an error is based on incorrect declara - tion of income or if no tax return has been submitted. 6.2 Criminal Penalties There are three main levels of tax crime in Sweden: minor misdemeanour (Sw: ringa skattebrott ), regular tax crime (Sw: skattebrott ) and aggravated tax crime (Sw: grovt skattebrott ). The penalty for a minor mis - demeanour never exceeds a fine. A regular tax crime may lead to a prison sentence of up to two years. For an aggravated offence – for instance, if the accused submitted fake evidence or if the amount exceeds approx. SEK0.6 million – the maximum penalty is six years in prison. 6.3 Interaction Between Tax and Criminal Procedures No tax penalties may be levied if criminal procedures are considered. Hence, the STA would not make any claim for tax penalties if a criminal prosecutor plans to pursue criminal charges. If the STA were to impose tax penalties, that would be regarded as a punishment blocking a criminal prosecutor from pursuing criminal charges under the principle of ne bis in idem (double jeopardy). 7. Administrative Co-Operation 7.1 Legal Framework for Administrative Co- Operation Sweden is a member of the EU, which comes with cer - tain obligations to comply with EU legislation. Binding EU law supersedes Swedish internal law based on these obligations. All tax treaties are passed as domestic law. OECD ModelTax Conventions may be used as a basis for interpretation of relevant domestic law.
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