Sweden Tax Agency Clarifies Deduction of Interest on Residential Loan

The Swedish Tax Agency Dec. 16, 2022, issued Advance Notice No. 103-22/D, clarifying interest deductions upon maturity of certain residential mortgage loans. A company provided loans against security in a borrower’s residential property, for repayment payment upon the borrower’s death, permanent relocation, or transfer of the residence. The taxpayer sought clarification regarding the deductibility of interest paid on the loan. The tax agency held that: 1) generally, interest is deductible in the year in which it is paid; 2) the loans in question don’t require cash payment of interest, but instead add the interest onto the debt owed; 3) interest ...