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NPS to recover $7.8 million in taxes paid on Swedish investments

Published: 20 Nov. 2025, 14:18

The National Pension Service’s Seoul Northern Regional Office in Seodaemun District, western Seoul, on Nov. 3 [NEWS1]

Korea’s National Pension Service (NPS) will now be exempt from paying withholding tax on dividends from listed stocks in Sweden, and will reclaim about 11.5 billion won ($7.8 million) that was previously paid.

The NPS Investment Management division said Thursday that Sweden’s tax authority recognized the pension fund’s tax-exempt status on Oct. 28 and confirmed the refund of taxes already paid. As a result, the NPS will receive back roughly 11.5 billion won in dividend taxes it paid on investments in Swedish listed equities from 2016 to 2020.

Further, the NPS also will no longer have to pay approximately 8.6 billion won in taxes annually based on last year’s withholding amount. Refund procedures are also underway for an additional estimated 11.8 billion won that was paid between 2021 and 2024.

The NPS argued its case based on the European Union’s (EU) nondiscrimination clause. Under the Treaty on the Functioning of the EU, member states may not treat foreign institutions unfavorably compared to comparable domestic institutions.

Sweden, however, granted tax-exempt status to its own public pension funds, the AP Funds, while imposing taxes on the NPS on the grounds that it is a foreign institution. In 2021, the NPS applied for exemption citing the EU nondiscrimination clause.

Because there was no deadline for a decision, the review dragged on for nearly five years. The NPS continued responding with local tax advisory work and supplemental materials.

Earlier this year, Finland’s public pension system won a similar case in Sweden. Citing that precedent, the NPS pressed for a decision in May, ultimately securing a refund without resorting to interstate litigation. It is the first time a Korean public pension scheme has been granted tax-exempt status in Sweden and the second among foreign public pension funds, after Finland.

Last year, the NPS also reclaimed about 8 billion won in Finland using the EU nondiscrimination clause. Refund procedures are currently underway in Germany, Italy, Austria and Poland.

“This refund is the result of persistent efforts to protect and grow the public’s retirement assets despite challenges in the international tax environment,” said Seo Won-joo, chief investment officer of the NPS Investment Management division. “We will continue seeking tax-efficient opportunities in each country to support the fund’s stable growth.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY NAM SOO-HYOUN [[email protected]]