Economic Commentary: Tax planning may have contributed to high indebtedness among Swedish companies

Date 18/06/2012

The European Commission notes in a report published in February 2012 that the private sector in Sweden, that is, households and corporations, has a high level of indebtedness. In this Economic Commentary the authors analyse more closely Swedish corporations' liabilities, which comprise the major share of private sector debt. Their analysis shows that loans from inter-group companies abroad have grown rapidly and contribute substantially to the high level of debt among Swedish companies. However, these inter-group loans should not be assessed in the same way as, for instance, bank loans, as the relationship between lender and borrower is entirely different with these loans. Tax planning provides one contribution to the high level of indebtedness among Swedish corporations in a European perspective. At the same time, the authors show that the Swedish corporations' level of indebtedness has fallen during the first decade of the 2000s, which would seem to contradict the claim that corporate debt levels are a problem.

 

Read the whole Commentary in the PDF-file.