The Swedish government will propose a corporate tax cut to 20%, down from present 22% according to Finance Minister Magdalena Andersson and Deputy Finance Minister Per Bolund. The corporate tax rate of neighboring Finland has been 20% for some years now.

The proposed changes also include limitations to the deductibility of interest payments for companies. The aim of the proposal is to make equity financing more attractive compared to loans. The ministers stated that aggressive tax planning will become more difficult due to reductions in the deductibility of interest.

“With the proposals we want to strengthen competitiveness and create a more dynamic business climate,” they said on business daily Dagens Industri’s website.

The Finance Ministry will today circulate a Memorandum to interested parties.

The proposed changes would be implemented on July 1st, 2018.