Group contribution

A group contribution (koncernbidrag) is a transfer of funds between a parent company and a subsidiary, or between subsidiaries, that is tax-deductible for the company giving it and taxable for the company receiving it. The aim is for a group to be taxed roughly as if it were a single company: profit in one company can be offset against a loss in another.

For a group contribution to be accepted for tax purposes, the requirements include that the parent company owns more than 90 per cent of the subsidiary throughout the financial year, that both companies report the contribution openly in their tax returns and that there is a genuine transfer of value.

Group contributions are often used in structures with holding companies. The rules are detailed, and an incorrect contribution can be rejected by the Swedish Tax Agency (Skatteverket).