CJEU - Recent Developments in Direct Taxation 2024

1. Introduction

Sweden introduced a bank risk tax in 2022. Swedish credit institutions (banks) are liable to tax if the sum of their liabilities at the beginning of the tax year exceeds a threshold limit. The threshold limit was set at SEK 150 thousand million (approx. EUR 13.3 thousand million) for tax years commencing in 2022. The tax rate was 0.6% of the sum of the taxable liabilities (2023). When assessing the threshold, a groups of companies are assessed as one. With respect to foreign banks, only the Swedish parts could be assessed together. As the tax was designed, the tax covered only nine large Swedish credit institutions, excluding all smaller credit institutions. Foreign banks were only subject to the tax with respect to their Swedish branches. According to the government, the main objective of the tax was to strengthen public finances by taxing large credit institutions. The reason for targeting large banks was that they potentially could create significant indirect costs for society. On 3 September 2021, the Swedish government asked the Commission whether the tax constituted State aid under Article 107(1). Article 107(1) of the TFEU reads as follows: “Save as otherwise ...