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Review decision Mack

The Swedish National Tax Board has announced a review decision in an internal pricing issue to AB Volvo’s American subsidiary Mack. The decision results in an increased taxable income for AB Volvo for the years 2002 and 2003 totaling SEK 828 M, corresponding to tax of SEK 232 M. In addition, the Tax Board levied a tax surcharge of SEK 83 M. As a result of the decision, Volvo has been placed in a double taxation position.

AB Volvo will appeal the decision. AB Volvo considers that the Tax Board increase is unfounded since the internal pricing in Volvo’s opinion complies with OECD’s guidelines. Volvo expects that the resulting double taxation will be eliminated through a decision in Swedish courts alternatively in an agreement between the two national governments involved. Accordingly, the company is making no reserve allocation in its accounts.

December 4, 2008

Reporters who want more information, please contact:

Mårten Wikforss, +46 31 66 11 27 or +46 705 59 11 49