Investing.com -- Swedish business representatives have recommended a cost deduction-based tax incentive for research and development over a refundable tax credit alternative, telling the government the deduction approach would better enhance Sweden’s international competitiveness.
The Swedish Business and Industry Tax Delegation said the cost deduction method offers larger tax relief and could influence companies’ location decisions. The deduction would provide businesses an extra 200% deduction on qualifying R&D wage costs.
Sweden’s Ministry of Finance launched a consultation in March seeking feedback on two R&D income tax incentives. The alternatives are the increased cost deduction or a refundable tax credit at 20% of the wage base.
TechSverige, the main industry group for Sweden’s tech sector, said Thursday the cost deduction approach would position Sweden more competitively against R&D incentives in other countries.
"That alone creates attractiveness for R&D investments in Sweden, which in the long term strengthens us as a knowledge nation," the authors wrote.
Industry bodies said the cost deduction is simpler to implement and would help attract new business to Sweden.
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