November 18, 2014 - Assignment

Swedish Tax Agency concludes legal proceedings against the private equity industry regarding taxation of carried interest

Further to the Supreme Administrative Court’s ruling and decision on 5 November 2014 regarding the taxation of carried interest in private equity funds, the Swedish Tax Agency has decided that it will not continue its legal proceedings against Swedish advisory companies to such funds.

In the matter involving NC Advisory AB (advisor to the Nordic Capital funds), the Administrative Court of Appeal ruled in complete favor of NC Advisory AB in December 2013. The Swedish Tax Agency appealed the ruling but the Supreme Administrative Court has now decided not to grant leave to appeal. The ruling from the Administrative Court of Appeal is therefore final. This ruling has now set a precedent for other cases against Swedish advisory companies to private equity funds and the Swedish Tax Agency announced in a press release on 14 November 2014 that it will not continue to pursue these cases.

The Swedish Tax Agency will, however, continue to let the courts consider whether the partners in private equity funds should be taxed according to the so-called “closely-held company” rules on profits which have been repatriated.

NC Advisory AB was advised by Mannheimer Swartling in the matter. The firm’s team consisted of Sven-Åke Bergkvist, Olle Flygt, Martin Nilsson, Niklas Hagbard and Carl Beyer.