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Sweden's Supreme Administrative Court reverses earlier decisions in aircraft leasing cases

6/24/1998 12:00 AM CET
Press release

Sweden's Supreme Administrative Court reverses earlier decisions in aircraft leasing cases

PRESS RELEASE, JUNE 24, 1998                             48/98

Sweden's Supreme Administrative Court reverses earlier decisions in aircraft leasing cases

Sweden's Supreme Administrative Court today decided not to accept tax deductions for value decreases in two limited partnership companies active in aircraft leasing. The Supreme Administrative Court thereby reverses the decisions made earlier in respect of these two cases.

In 1988, Skanska became joint owner in two Swedish limited partnership companies. These companies acquired aircraft from Boeing and subsequently leased them to international aircraft companies. In proceedings started in 1990, Sweden's National Tax Board claimed that the partners in the limited partnership companies did not have the right to make deductions for depreciation in the value of the aircraft. Both the County Administrative Court of Appeal and the Swedish Fiscal Court of Appeal have ruled against the National Tax Board's claim, but the Supreme Administrative Court has now reversed these decisions. Analysis of the reasons for the Court's decisions remains to be made.

The immediate effect of the Supreme Administrative Court's decisions is that Skanska must pay tax earlier than would otherwise have been the case. The decisions, which relate to taxes for the years of 1989 and 1990, also mean that Skanska's taxes for the years 1991-1998 will now require adjustment. The decisions will have no effect on the income of the Skanska Group, since the necessary provisions have been made. The liquidity effect is estimated to involve a net outflow of about SEK 200 million.

Skanska is a joint owner in three other limited partnership companies, which are engaged in similar operations. These companies are also the subject of tax proceedings. It is too early to say how today's decision will affect the outcome of these other processes.

 

Danderyd, June 24, 1998

SKANSKA AB
Corporate Communications

 


For further information, contact: Cecilia Schön, Senior Vice President, Skanska AB, Tel +46 8 753 87 99
Staffan Schéle, corporate finance, Skanska AB, Tel +46 8 753 82 72