• Sweden edition
 
The Ark runs tax gauntlet with music magazine

The Ark runs tax gauntlet with music magazine

Published: 28 May 2010 15:59 GMT+02:00
Updated: 28 May 2010 15:59 GMT+02:00

Kerstin Alvesson at the Swedish Tax Agency (Skatteverket) told The Local on Friday that as an investigation has not yet been opened into the tax case, it was only possible to talk in general terms about sales tax rules.

“The 6 percent sales tax only applies to magazines where the accompanying product does not hold any value. Like kids magazines where you get a toy when you buy the magazine. The price is still the same because the toy has no value,” Kerstin Alvesson explained to The Local.

The tax agency was on Friday unable to comment on whether an investigation would be launched into the innovative tax trick by The Ark who were able to circumvent the higher 25 percent rate levied on music, and pay the 6 percent rate levied on books and magazines instead.

The Local reported at the end of April of the plan by the glam rockers to release their new album entitled In Full Regalia together with a 100 page magazine featuring articles spanning the 20-year history of the band as well as lyrics to the songs.

The magazine went on sale at a retail price of 99 kronor ($12) and it is the value of the magazine relative to the value of the CD that would be the factor considered when determining sales tax levies.

Sales tax laws introduced in 2002 state that magazines with accompanying products, such as books, movies or CD’s, where the product has a value, do not fall under the 6 percent sales tax bracket. Instead there should be an increase in price and they should have a 25 percent sales tax meaning that the band in this case may become liable to pay the difference in price and a tax surcharge.

"Any investigation would have to see whether or not the CD has a supplementary value to the magazine and then should have raise the value. In this case it was not a small flyer, the magazine was 100 pages long, so that would be taken into account," Alvesson explained.

Alvesson furthermore added that there are additional clauses in the law that could exempt you from having to pay the additional charges with the law allowing for "special circumstances", such as a first time declaration.

Kerstin Alvesson underlined that she does not want to speculate about the individual case concerning The Ark and their magazine.

“I can’t say that there will be an investigation or what a possible outcome of one would be,” she said.

While the tax break was a cited as a motivating factor for the band's marketing decision, it was not the only one.

"There are around 80 specialized record outlets and a lot of towns don't have a record store any more. Instead, we'll now have 600 sales outlets, so on Monday April 26th hardly anyone will be more than 500 metres from an Ark CD," the band's manager Jon Gray told the Svenska Dagbladet daily at the time.

The innovative promotion idea seems to have paid off with album selling gold (more than 20,000 albums) within only a week of going on sale. The album reached as high as second place on the Swedish top chart, Sverigetopplistan.

The Ark has enjoyed enormous popularity in Sweden over the past decade when all four of its albums topped the Swedish charts.

Lee Martin

Paul Rapacioli (paul.rapacioli@thelocal.com)

Don't miss...X
Left Right

Your comments about this article

20:08 May 28, 2010 by Wertyx
Bottom line: taxes, taxes, taxes and more taxes.

Why are books and magazines taxed 6% while music is taxed 25%?

Why do I pay taxes on my salary, and then I pay some more taxes when I use that money that was already taxed?

Go The Ark! I don't care much about their music but I appreciate the effort to find original ways to market and distribute it.
09:57 May 29, 2010 by Nemesis
In plain language, a few kids who are not part of the in crowd in Stockholm stuck there heads above the parapet and now the begrudgers and malcontents have to do everything they can, to stop them being a sucess.

The reality is, what the kids in the Ark did was a marketing ploy. The Ark should be paid back all taxes they have paid on this issue as it was an expense for marketing there band.

I wish the guys from the Ark every sucess and hope they continue the Swedish tradition of Swedish music punching very far above its weight.
18:09 May 29, 2010 by Puffin
@ Nemesis

Now I admit that it was creative but I'm not sure the Ark can be called *kids* - it's hardly like this is a new group of youngsters just starting out is it?

These guys are one of Sweden's most well known groups and have played together for almost 20 years (they are all in their mid 30s)

This was bound to attract attention as the Ark has had a whole string of number one hits and were even at the Eurovision song contest in 2007
22:13 May 29, 2010 by Tusker
Special poseur tax required for this mob, me thinks!
03:02 June 1, 2010 by Da Goat
Seeing as the album can and will be ripped and moved digitally

then the album is in fact worthless and the ARK have found the ultimate solution really sell a magazine with a free cd (worth 5 crowns) and pay 6% tax only .

the ARK are genius's they have realized that music cd's are not worth much really so they are selling the music only in the form of a magazine.

next step sell the music as a zip file as a computer file is maybe not taxed at all then the purchaser can make their own music files (ie it is not music until after purchase)
Today's headlines
Snake hunt after man claims playground bite
The Swedish adder. Photo: Piet Spaans

Snake hunt after man claims playground bite

A man claimed to have been bitten by a poisonous snake at a paddling pool in Gothenburg on Thursday prompting a hunt which ended without a trace of the offending reptile. READ  

Stockholmers sound off on 'beautiful Swedes'
Swedish girls in Stockholm. Photo: Susanne Walström/Imagebank Sweden

Stockholmers sound off on 'beautiful Swedes'

Following a Nordic survey in which Swedes were voted the "most attractive", The Local hit the streets to see what Stockholmers thought. READ  

Sweden keeps eye on Norway bomb threat
Norwegian police car at Oslo Gardemoen Airport. Photo: TT

Sweden keeps eye on Norway bomb threat

The Swedish Security Service (Säpo) have said that an "imminent terror threat" to neighbouring Norway doesn't yet affect Sweden although developments are being closely followed. READ  

Seven-year-old Swede cycles to Berlin
The Blomdahl family in Berlin. Photo: Private

Seven-year-old Swede cycles to Berlin

Edvin Blomdahl is seven-years-old. He also cycled from Sweden to Berlin, a journey of 370 kilometres, in four days. READ  

Opinion
'Gaza conflict needs help, not empty rhetoric'
Demonstrations at Sergels Torg in Stockholm. Photo: Kent Vilhelmsson

'Gaza conflict needs help, not empty rhetoric'

As the rhetoric rises at demonstrations in Swedish cities, Stockholm-based Israeli writer David Stavrou calls on Swedes to think before they shout and to cast a critical eye over much that is written and said about the conflict in Gaza. READ  

Brit's charity tractor trek heads for Sweden
The vintage tractor ready to travel from UK to north Norway. Photo: Peter Matheson

Brit's charity tractor trek heads for Sweden

A British man is set next month to drive from Scotland, across Sweden, and to the northern tip of Norway on a vintage tractor to raise money for a cancer charity. READ  

Sweden agency hikes heat warning to 'extreme'
This canine friend is not amused. Photo: TT

Sweden agency hikes heat warning to 'extreme'

Swedish weather agency SMHI has raised its weather warning to class 2, giving notice of "extremely high temperatures" in parts of the country. READ  

Songs for a hot Swedish summer
Ted Gärdestad. Photo: TT

Songs for a hot Swedish summer

Contributor Paul Connolly has put together a list of Swedish songs to capture balmy summer days, which in his neck of the northern woods are pushing the mercury above 35c for the first time in a century. READ  

Swedes suffer as buses boil in the summer sun
Photo: TT

Swedes suffer as buses boil in the summer sun

Stockholm's local traffic authority has received almost 300 complaints since June 1st with many regarding stifling heat on the city's buses, which lack air con. READ  

Grounded flights strand Swedes in Tel Aviv
Photo: Matt Rourke/TT

Grounded flights strand Swedes in Tel Aviv

UPDATE: About 270 passengers planning to fly to Stockholm are still stranded in Tel Aviv, and airlines have stated that flights will likely be grounded on Thursday as well. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Society
Swedes voted 'most beautiful' in the Nordics
Business & Money
Sweden demands EU clarity on Bitcoin tax
National
Swedish organic sales enjoy 'amazing' growth
Photo: Johan Nilsson/TT
Society
What's On in Sweden
Gallery
People-watching July 23
Blog updates

22 July

Det (The Swedish Teacher) »

"Hej! “Det” is a personal pronoun that can be used in many ways, and it might me confusing if you always translate “det” to English “it”. In this article I will do my best to guide you to how to use “det”. Det replacing a word, a phrase or a clause Let us begin with the less confusing..." READ »

 

22 July

PROTECTING GIRLS FROM ABUSE OF THEIR RIGHTS (The Diplomatic Dispatch) »

"Today (22 July) my Prime Minister, David Cameron, and UNICEF, are hosting the world’s first #GirlSummit in London. The Summit’s aim is to mobilise domestic and international efforts to end the appalling practices of Female Genital Mutilation (FGM) and Child Early Forced Marriage (CEFM). This is a high priority for the UK government and the Prime..." READ »

 
 
 
National
Swedish cops elect not to shoot 'angry elks'
Business & Money
New alcohol retail rules threaten micro-breweries
Gallery
People-watching Båstad
Business & Money
Sweden falls to third in global innovation index
Society
Swedish ornithologists keep webcam watch
Photo: Andreas Nordström/Image Bank Sweden
Gallery
Top ten Swedish beach hot spots
Tech
Swedish Wiki vet sets new content record
Photo: Fastighetsbyrån
Lifestyle
In Pictures: The Local's Property of the Week
Photo: Finest.se
Gallery
People-watching July 15-16
Photo: Ola Ericson/Image Bank Sweden
Society
What's On in Sweden
Photo: Lisa Mikulski
National
Hope springs eternal for expat pet shop owner
Gallery
Princess Estelle steals limelight at mum's birthday
National
Swedes risk infants' lives by covering up prams
National
Swede runs for office just using Bitcoin funds
Gallery
People-watching July 11-13
National
Malmö mayor slams Danish beggar ban
National
Swedish anti-abortion midwife sues county
National
Swede's salary chopped for Facebook use
Sponsored Article
Introducing... Your finances in Stockholm
Sponsored Article
Introducing... Housing in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

710
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se