Press release

Tax rulings contribute SEK 300 M to Volvo

2005-06-15

AB Volvo HQ

Administrative Court of Appeal has delivered rulings in several tax cases affecting different companies in the Volvo Group. Taken as a whole, the Administrative Court of Appeal rulings will have a positive effect of about SEK 300 M on AB Volvo’s second-quarter earnings.

In all, 16 different rulings have been delivered in cases affecting the tax-assessment years 1991-1999. All of the cases related to appeals against County Administrative Court rulings and involved a number of different issues. To a large extent, the Administrative Court of Appeal’s verdicts followed the rulings delivered earlier by the County Administrative Courts. However, the Administrative Court of Appeal has granted AB Volvo a tax deduction of SEK 1.5 billion on the sale of shares in Volvo Trucks North America to an American subsidiary in 1996.

To a large extent, the Volvo Group had already made provision for tax expenses based on the original rulings of the County Administrative Courts. Accordingly, the rulings of the Administrative Court of Appeal will have a positive effect of approximately SEK 300 M on AB Volvo’s second-quarter earnings in 2005.