Tax Planning with Holding Companies for US Investors in Europe - A Comparative Study of Holding Regimes in Sweden and Switzerland

Sammanfattning: In the wake of the globalization, international tax planning structures has become vital for US investors in order to meet economic challenges and to survive on the competitive market. This research indicates that countries in Europe, such as Sweden and Switzerland, provide a favourable environment for US multinational corporations to set up holding companies as a way to enjoy benefits of legal tax planning. In a time when cash-strapped governments across Europe are struggling with its economy, complex tax planning structures by i.e. Apple, Amazon, Facebook, Google, and Starbucks, have been criticized and deemed ‘immoral’. OECD, The European Commission, and governments are pushing for a comprehensive action plan to counter tax planning. The scope of the Swedish tax rules concerning limitations on deductibility of interest payments were extended to as per 1 January 2013. This means that restrictions on interest expenses apply on any loan within an affiliated group, whatever its purpose. This is where we are to today. Notably, it is of importance to separate the legal and the moral aspects. Whether or not US multinational corporations avoid US taxes by using legal tax planning loopholes, they are not doing anything illegal. From a legal perspective, it has been shown that this it is not only a unilateral issue, instead it is a question how to reconcile international tax law with an ever-changing business environment.