Sweden transfer pricing documentation guide
February 25, 2008
Katarina Kuuskoski and Bo Lindqvist of Baker & McKenzie in Stockholm give a detailed account of the documentation environment in Sweden
According to Chapter 19, Section 2a and 2b of the Swedish Law on Tax Returns and Statements of Earnings and Tax Deductions (Sw. Lag (2001:1227) om självdeklarationer och kontrolluppgifter), transactions between related companies have to be documented. The required documentation shall include a description of the company’s legal and operational structure, information regarding the characteristics and scope of the transactions, a functional analysis, a description of the pricing method chosen and a comparability analysis. The functional analysis should provide an analysis of the arm’s length price taking into consideration the functions, risks and resources of the related parties. The new rules apply to financial years commencing on 1 January 2007 or later, i.e., the documentation required must be enclosed when a company files its corporate income tax return for the fiscal year 2008 (the financial year 2007).
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