• Sweden edition
 

US ambassador: change Swedish VAT rules

Published: 12 Mar 2012 13:22 GMT+01:00
Updated: 12 Mar 2012 13:22 GMT+01:00

The US ambassador to Sweden, Mark Brzezinski, recently wrote a letter to the Swedish minister for finance Anders Borg, advising him that Sweden would do better following Austria’s example on value added tax (VAT) reimbursements for diplomats.

“There appears to be almost universal frustration with the current system, which we believe is an unnecessarily cumbersome and time-consuming process for both the Swedish government and for individual diplomats in Stockholm,” Brzezinski wrote.

The current system calls on foreign diplomats in Sweden to submit VAT refund requests quarterly, but also requires that diplomats submit original receipts for each individual item, according to guidelines from the Swedish Ministry of Foreign Affairs.

After carefully looking into the matter, Brzezinski concluded that the scheme currently used in Austria where foreign diplomats can elect to receive a quarterly lump-sum payment in lieu of collecting and submitting individual receipts.

"It would dramatically reduce the workload of the Swedish tax authorities in reviewing quarterly receipts submitted by diplomats, and it would make VAT reimbursement a much more transparent and efficient process," he wrote.

According to Brzezinski, this system has won praise from both the Austrian government and diplomats in Austria for streamlining the previously cumbersome reimbursement process.

The Austrian payment, €330 per quarter, with an annual ceiling of €1,320, is based on the average quarterly expenditure of diplomats and the cost of living in Vienna, which according to calculations made by the U.S. State Department in the case of Sweden would be 60 percent higher.

“Therefore, we propose a quarterly lump-sum payment to diplomats in Stockholm of 528 Euros per quarter (approximately 4,650 kronor). We would be happy to provide details on the U.S. State Department’s cost of living data.

The ambassador closed his letter urging the minister to look into the matter, saying he will urge other embassies in Stockholm to support his proposal.

Rebecca Martin

twitter.com/darlinbec

The Local (news@thelocal.se)

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Your comments about this article

15:36 March 12, 2012 by RobinHood
Please would The Local keep us updated how this goes. It's intensly interesting, and relevant to the many many readers here who happen to be American embassadors.
15:51 March 12, 2012 by Happy Expat
Good to see the diplomats of such a war torn country worrying about the important things in life.

It would also be interesting if the local could do a quick comparison with the arrangements in USA.

I'd suggest he goes to Austria but question whether they really deserve him.
17:20 March 12, 2012 by apelsin000
How could we little people get VAT refund? i won't mind submitting receipts...
17:44 March 12, 2012 by rramirez
My gut feeling is that anybody who challenges anything tax-related in Sweden probably has a pretty good point. Considering the hundreds of diplomats in Sweden and the number of purchases each one makes over the course of regular life each year it must yield a mountain of receipts and a ton of wasted time in processing and verification.

That said, who cares? Why does the Local waste time reporting insignificant stories like this and why am I wasting my time commenting on it?
18:16 March 12, 2012 by Essingen
After carefully looking into the matter, Brzezinski concluded that the scheme currently used in Austria where foreign diplomats can elect to receive a quarterly lump-sum payment in lieu of collecting and submitting individual receipts.

".....it would make VAT reimbursement a much more transparent and efficient process,"

Transparency in business means open and accountable. Surely a system that relies on making a payment in lieu of collecting and submitting individual receipts is LESS transparent.

If this is all he has to worry about he needs to get a life. If he had been sitting in Guantanamo for 10 years without a trial he would have something to worry about.
18:56 March 12, 2012 by gpafledthis
Go Go !! swedish taxman !! Hose him-when he squeals ya got his attention then really make him "Proud To Be An American!!" Sure changed his tune from the youtube speech !! Interferring in the Internal Affairs of anothers nation Ha Ha developing some sympathy for the average swede?? I don't think so !! Give him the new Lutefisk flavored Plopp as a parting gift !! OR vacation him in Norway to value sweden11 Mr Amb buy Linn Larssons cookbook and enjoy what life gives you !! What Hirohito said "we must endure the unendurable" If Plopp can apologize so can you !!
20:10 March 12, 2012 by Trenatos
Or, you know, you could just abide by the laws of the country you are an ambassador in and quit whining like a child.

'I'm an ambassador, so I feel I have the right to tell you how you should dictate your economic rules for foreign ambassadors in your country!'

Good luck with that.

Also, don't you have better things to do than write letters about how annoyed you are with having to work within a countrys vat laws?
20:21 March 12, 2012 by Octover
I say give it to him. Then in return the IRS recognizes that the income tax rate is higher here so under the double taxation treaty as long as my residence and income are in Sweden I don't have to file burdensome paperwork that is pointless. Also eliminating the reporting of accounts and assets worth more than $10,000.

It would merely make things more efficient. Worry about the tax cheats living in tax havens. Skatteverket does a good enough job collecting their bit.
20:45 March 12, 2012 by urban stkhlm
Just had to check my calendar... nope, not April 1st yet!
21:04 March 12, 2012 by BritVik
Clearly the Yanks are feeling the pinch, and are hoping to extract that little extra from the Swedish tax coffers - to pay for mistakes elsewhere n the world perhaps.
21:50 March 12, 2012 by chase101
I bet all american ambassadors are reading this article now
21:52 March 12, 2012 by hipersons1
haters gonna hate ... but take a moment to consider the whole picture:

1. There are hundreds of foreign diplomats in Stockholm, the majority of whom are NOT ambassadors. The U.S. ambo is probably just about the only person who can actually get traction on this issue. Lower level diplomats are not at liberty to take action themselves on this.

1 a. Many of these people read the Local because they don't speak Swedish, so YES there are people among the readership here who care. (we're not all unemployed disgruntled sambo's!)

2. It is simply a fact that most other countries have a much better system of handing VAT reimbursements (which are only on certain items, not everything you buy). Some involve the Austrian system, some you get a special card that you swipe when you buy stuff and the reimbursement happens automatically. Diplomats, who have important work to do, end up wasting many hours of their time four times a year to complete something that does not need to take them any time at all. Sweden is way behind compared to its comrades in this department and it is time to modernize, even if it is just for the sake of day-to-day diplomacy.

3. If Sweden choses to modernize it will not change Sweden's tax intake for the year because these diplomats are already entitled to this refund. All the ambassador is asking for is a simpler system, not a lowered tax burden.

and fwiw I'm not a diplomat nor am I related to one.
22:27 March 12, 2012 by Grävling
The thing I dislike is the fact that they ask for each receipt stapled to an A4 sheet of paper. Each one, I hate this because it is a grande waste of paper, makes the files massive and is so old fashioned?

Can we give them the real receipts and an excel file, so the tax people have to do a little more work / some work, for those 5 diplomats...

The swedish tax system need re-inventing.
00:19 March 13, 2012 by hipersons1
Also, here's the U.S.'s system for the commenter who was interested: http://www.state.gov/ofm/tax/sales/index.htm

"OFM issues tax exemption cards to eligible foreign missions, mission personnel and their eligible family members consistent with international law, domestic statute, and the underlying principle of reciprocity. Tax cards provide point-of-sale exemption from sales and use taxes throughout the United States. This system provides immediate relief from taxes without the administrative burdens, costs, and delays commonly associated with reimbursement systems."
06:58 March 13, 2012 by Rick Methven
I am all for it, as long as I can do the same and reduce the cost I pay to my accountant to sort out my VAT receipts.
08:51 March 13, 2012 by karex
American hypocricy at its best. Not long ago I seem to remember another article about the US putting its own citizens living overseas through the tax ringer by using some obscure law created in the 70s to catch drug dealers and criminals, or something to that effect? But the diplomats don't want to go through the trouble of collecting receipts, however they expect the US citizens to figure out by what I heard are extremely complicated rules and regulations to fill out tax returns and if they make a mistake are automatically considered a criminal. What's wrong with this picture?
10:18 March 13, 2012 by libertarianism
Tangled, mazed wads of beaurocracy provide employment for countless state workers, eller Mr. Ambassador?
12:50 March 13, 2012 by Iraniboy
How about this Mr Ambassador:

US would do better following EU's example on visitor visa issuance. No Visa for American citizens, maximum 2 weeks for any other citizen! The US cumbersome system demands European citizens to ask for permission 3 days before their journey and other citizens to ask for..hmm.. let's see 2 weeks? 4 weeks? 1 month? 12 months?! Yes it can be even more than 12 months and please don't tell me it can take 12 months to investigate a case!!!
13:23 March 13, 2012 by LisaPio
It is sad to see this. We wrote a letter recently to the Ambassador asking for action and help for those innocent US citizens who are unwittingly caught up in the current US campaign to heavily penalize intentional tax cheats. See the following The Local article: http://www.thelocal.se/39522/20120306/

The US Consul answered and said, " U.S. Embassies around the world in general do not get involved in taxation issues." Sounds a bit hypocritical to me. I guess they only get involved when it affects their own pockets, not the citizens they are there to represent and protect.
15:39 March 13, 2012 by CJ from Sunshine Desserts
aw come oan ! they pay no taxes, get a lot of freebies, like free accomodation, can`t be prosecuted, don`t pay taxes on cars, get the free booze or at least they can buy it at tax-free prices 1btl/month. Perhaps if the US embassy did not have an attachment of marines stationed there they would have more cash over ? What does the US ambassador get as salary here in Stockholm ...about 70000 SEK a month tax free ?
15:57 March 13, 2012 by hilt_m
Well said hipersons1.
16:44 March 13, 2012 by Michael84
not surprised that the US ambassador demands changes in rules/laws of an independent country.

@iraniboy

you might wanna sign in with a different user name cause yours indicates your nationality and whatever you say will be seen as the opinion of all Iranians. that ain't right.
17:09 March 13, 2012 by HYBRED
Ambassador's generally get their job because they are owed a favor by the president. And to have the post in Sweden would be considered a big payback for something. And yet he finds something to whine about. Maybe he needs to get a transfer to someplace like Afganistan for a wake up call.
23:37 March 13, 2012 by Iraniboy
@Michael84

Well that's a good idea and I'm sorry for that. But as a matter of fact, nobody likes to wait for a permission to travel one year. Not even animals! So the issue is regardless of nationality! It is common among all mammals!
04:48 March 14, 2012 by Douglas Garner
the first thing that caught my eye was the requirement to attach original receipts... Original receipts are probably required for reimbursement of expenses by the US gov't as well as Swedish VAT... plus you have to have an original receipts if something you have bought goes bad.

So, how many original receipts do YOU get when you make purchases`?
10:13 March 14, 2012 by Lukestar1991
RobinHood,

I couldnt have said it better myself, what a f**ktard.
14:40 March 14, 2012 by cogito
The president he represents is treating all American expats as tax criminals, burdening them with complicated rules and forms and threatening draconian penalties and prison even for inadvertent non-compliance.

It has been estimated that the paperwork needed to comply will take 20-30 hours.

Those taxpayers being stalked pay for the ambassador's lavish housing, food and travel.

And he's whining about collecting a few receipts
17:14 March 15, 2012 by tgolan
everyone is using creditcards so why not outsource the problem and computerize it
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