By Dominic Chopping

STOCKHOLM--Tele2 AB said Tuesday that its second-quarter results will be boosted by the release of a 371 million Swedish kronor ($44.6 million) provision after the company received a favourable outcome in a Swedish tax case.

The Sweden-based telecom company said the Swedish Tax Agency has for the years 2013-2018 denied Tele2 deductions for interest expenses on intercompany loans, resulting in a negative tax effect of SEK350 million, and associated interest of SEK21 million as of 31 March 2021.

While Tele2 has appealed the decisions, a provision for SEK371 million has previously been made, it added.

Following a ruling by the Supreme Administrative Court, the Swedish Tax Agency has now endorsed Tele2's claims for interest deductions for the years 2015-2018, resulting in a positive tax effect for Tele2 of SEK200 million in total.

The remaining interest deduction claims for the years 2013-2014 with a tax effect of SEK150 million are currently under review by the Administrative Court of Appeal in Stockholm.

"Given the high likelihood of a ruling in favor of Tele2 on the remaining claims, Tele2 has decided to release the total provision," it said.

"Tele2 will also review how the Tax Agency's revised position may impact Tele2's taxes for 2019 and 2020, considering applicable legislation."

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

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