In a ruling by the Administrative Court of Appeal dated 8 November 2016, the Swedish Tax Agency's tax assessment notice was upheld and, accordingly, Bufab AB (publ) ("Bufab") has been denied deductions for certain interest expenses. The decision will result in non-recurring costs in the fourth quarter of 2016 amounting to approximately MSEK 25.

The Tax Agency has previously, by means of a tax assessment notice, denied Bufab deductions for certain interest expenses for the financial years 2009, 2011 and 2012. With support from leading tax experts, Bufab has maintained its opinion that the interest in question is deductible. Consequently, Bufab has not made any provisions, but has instead provided information about the matter in its annual report in the form of a contingent liability (see the 2015 Annual Report, Note 32 Taxes).

However, in its ruling on 8 November, the Administrative Court of Appeal upheld the Administrative Court's ruling in favour of the Tax Authority.

The ruling by the Administrative Court of Appeal means that Bufab will incur an additional tax expense of about MSEK 25. This amount will be accounted for as a non-recurring cost in the fourth quarter of 2016. After this, Bufab has no tax-related contingent liability.

Bufab intends to analyse the ruling further and will consider applying for leave to appeal to the Supreme Administrative Court.