European private equity firms have won a significant victory in their battle for recognition as investment companies, as the Swedish tax authority has dropped its Skr900m (€100m) tax case against Bure Equity, a Gothenburg-based private equity firm.

Peter Sandberg, the president and chief executive of Bure, said: "It is a great relief to us the dispute has been settled." A Skr900m one-off payment to the tax authorities would have been a bad hit to Bure, which made a loss of Skr380 in the first half of this year.