Sweden’s Carried Interest Tax Crusade Jeopardizes Haven Status

Private equity companies say a decision by the Swedish Tax Agency to more than double duties on their carried interest will jeopardize Sweden’s status as an investment haven and could force advisory firms to fold.

The agency will regard the profit-share set aside for fund managers, called carried interest, as salary subject to tax of about 56 percent, rather than as capital income with a rate of about 25 percent. So far, 39 employees at Nordic Capital, IK Investment Partners and Segulah, as well as the companies that advise their funds, face more than 3.3 billion kronor ($500 million) in additional payments, according to documents outlining the back taxes obtained by Bloomberg from the agency.