1
Introduction ... 1
1.1 Background ... 1
1.2 Purpose ... 3
1.3 Methodology and material ... 4
1.4 Delimitations ... 5
1.5 Outline ... 6
2
Swedish CFC legislation ... 7
2.1 Introduction ... 7
2.2 General principles concerning taxation of a CFC ... 7
2.3 Ownership requirement ... 8
2.4 Low taxation ... 9
2.4.1 The main rule ... 9
2.4.2 The supplementary rule ... 10
2.4.3 The new supplementary rule ... 11
2.5 The branch extension rule ... 11
2.6 Tax credit – supplementary legislation ... 11
2.7 Summary ... 12
3
The freedom of establishment ... 14
3.1 Introduction ... 14
3.2 The internal market ... 14
3.3 Community law and direct taxation ... 14
3.4 Freedom of establishment in relation to CFC legislation ... 16
3.5 Restrictions on the freedom of establishment ... 17
3.6 The rule of reason test and grounds of justification ... 19
3.6.1 The cohesion of the tax system ... 21
3.6.2 The effectiveness of fiscal supervision ... 23
3.6.3 The counteraction of tax avoidance ... 24
3.6.4 The need to safeguard the balanced allocation of the power to tax between the Member States ... 25
3.6.5 The combination of grounds ... 25
3.7 Grounds of justification concerning Swedish CFC legislation ... 26
3.8 Summary ... 27
4
Sweden’s lack of double CFC tax relief ... 28
4.1 Introduction ... 28
4.2 When does double CFC taxation arise? ... 28
4.3 Swedish CFC legislation ... 29
4.3.1 Ownership requirement ... 30
4.3.2 Low taxation ... 31
4.4 Double CFC tax relief in Sweden ... 31
4.5 Summary ... 32
5
Analysis... 34
5.1 Introduction ... 34
5.2 CFC legislation in Sweden ... 34
5.4 Is the lack of double CFC tax relief a restriction on the
freedom of establishment?... 35
5.5 Can lack of double CFC tax relief be justified? ... 37
5.5.1 The cohesion of the tax system ... 37
5.5.2 The effectiveness of fiscal supervision ... 39
5.5.3 The counteraction of tax avoidance ... 40
5.5.4 The need to safeguard the balanced allocation of the power to tax between the Member States ... 41
5.5.5 The combination of grounds ... 42
5.5.6 Concluding remarks ... 43
5.6 Summary ... 43
6
Final conclusions ... 45
List of Abbreviations
