EQT Partners AB, a private equity investor, said it will appeal a decision by the Swedish tax authority to impose 647 million kronor ($100 million) in retroactive taxes on the company, its employees and partners.
Sweden’s tax authority has ruled that the return on certain investments in EQT funds should be taxed as income and not as capital gains in the years from 2007 to 2009, the Stockholm-based fund said in a statement.
“We’ve done this in exactly the same way for almost 20 years,” said Johan Bygge, chief operating officer at EQT Holdings AB. “The tax authority has now decided to make another interpretation and we think that’s very unfortunate because it creates great uncertainty for the company and the staff.”
The decision is the result of a review that started in 2007 on how private-equity companies and their employees and partners declare their income, said Helena Bigander, a project leader at the Swedish Tax Agency in Stockholm.
The ruling will impose extra taxes of 313 million kronor on income of 19 staff or partners. EQT Partners will have to pay another 334 million kronor for the same period, in addition to the 100 million kronor it was told to pay for a similar decision relating to income from 2006.
“Compensation from job performance should be taxed as job performance and we think this is compensation for counseling,” Bigander said. The authority has the right to change taxation going back six years, she said.
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