Tax Treaty Case Law around the Globe 2024

30.1. Introduction

In 2023, the Swedish SAC adjudicated two cases concerning tax credits in cross-border situations. Only the second case will be referred to and analysed in this chapter as it covers tax treaty issues. In addition, since the first case stems from a tax treaty issue, and deals with credit of tax according to domestic law, a brief mention is made in this introduction.

The query in the first case, SAC 2023 ref. 17, revolved around whether a taxpayer must possess foreign income that has been taxed abroad in the year when the offset is requested in order to be entitled to claim a foreign tax credit that could not be offset in a previous year (hence, carried forward). After consulting the preparatory work for the domestic law on credit of tax, the SAC found that no such requirement exists. Credit for tax was therefore deemed possible.

The second case, SAC 2023 ref. 37, deals with the interpretation and application of the tax treaty between Sweden and Italy (hereafter referred to as the tax treaty). The tax treaty is based on the OECD Model (1963). Deviations regarding interest, royalty and pension income exist, as well as a paragraph on matching credit. The case stems from ...