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Sweden unveils plan to slash corporate tax rates

Sweden unveils plan to slash corporate tax rates

Published: 13 Sep 2012 11:59 GMT+02:00
Updated: 13 Sep 2012 11:59 GMT+02:00

Sweden aims to cut corporate tax rates by 15 percent in 2013 in a move estimated to cost state coffers about 16 billion kronor ($2.4 billion).

"This is the most harmful tax of all," Prime Minister Fredrik Reinfeldt told reporters during a Thursday press conference.

In a proposal, the government unveiled plans to lower corporate tax rates to 22 percent from the current level of 26.3 percent.

"We want to provide a stimulus for both small and large businesses," enterprise minister Annie Lööf told reporters, according the Expressen newspaper.

The new lower rate, to be included in the government's forthcoming autumn budget proposal and go in effect on January 1st, would bring Sweden's corporate tax rates to a level below the EU average of 23.5 percent.

Around 8.8 billion kronor of the expected cost of the measure would be funded through tighter rules limiting interest payment deductions companies commonly claim on internal loans.

According to the government, the motivation for the cut is that Sweden's current corporate tax rate, which is above both the EU and OECD average, puts the country at a competitive disadvantage.

"The significant reduction of the corporate tax is expected to strengthen the investment climate and growth in Sweden," the government said in a statement.

"Because Sweden isn't situated in the centre of Europe, it's appropriate for our corporate taxes to be competitive."

The government also proposed a deduction for investors that would increase access to capital for new and growing businesses.

The cost of the new deduction is expected to run 800 million kronor and be implemented on September 1st, 2013 at the earliest, as the proposal must first be approved by the European Commission.

News of the pending corporate tax cut was welcomed by Swedish business groups.

"In the difficult financial climate business owners face today, this is a real injection for all business owners," Elisabeth Thand Ringqvist, head of the Swedish Federation of Business Owners (Företagarna), said in a statement.

"For those that have a hard time finding financing, the investors' deduction offers an opportunity to find new capital and the lowering of corporate taxes makes it easier to reinvest profits in the country."

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Your comments about this article

13:05 September 13, 2012 by Great Scott
16 billion kronor - 8.8 billion kronor = 7.2 billion kronor.

And who is going to pay the rest?

I expect the good news is we are all going to see some good price cuts! Ha,ha.
13:12 September 13, 2012 by Kalyissa
From what I gather is they are hoping that more businesses will move here with the lower Tax rate and that they will end up making some money from this because more businesses = more jobs = less people on unemployement.

Hopefully it does work like this at least. I'm not sure exactly however how much red tape there is with businesses here as I haven't looked in to that but hopefully this will give some kind of push.
01:08 September 14, 2012 by Eric1
Congratulation to Sweden. This new tax rate will help business become more successful and hire more workers. In turn increasing more revenue for the Swedish Government. These policies made America great but, now America is going hardcore socialist/Marxist lead by the Democrat party under the leadership of President Obama. If Obama is elected in November the American economy will collapse within 2 years. This is Obama's goal.
09:06 September 14, 2012 by fakeempire
lol @ Eric1 piggy backing on this article to spread your stupid ideas.
10:24 September 14, 2012 by djmarko
The US economy nearly collapsed after Bush left office!!! 8 years in power, Obama provided a stimulus whcih saved the US economy, so cant really understand your line of thinking!!!
13:21 September 14, 2012 by markusd
#5,

Claiming that Obama's stimulus saved the economy is like a person losing his job but 'saving' his lifestyle through credit card spending. It looks brilliant until the bill comes.

The fact is that there are very few instances where politicians spend money as productively as the people who made the money in the first place. First of all, they simply lack the ability, though their arrogance often prevents them from seeing this. Second, businesspeople and normal citizens are more likely to make decisions based on financial concerns. Politicians, however, also have to deal with political concerns which results in more inefficient spending.
13:26 September 14, 2012 by Marc the Texan
This will definitely help, but don't expect instant results. It takes time for the benefits to be felt.
15:43 September 14, 2012 by djmarko
maybe someone can explain what the republicans will do different if they win the elections?? considering the fact they nearly brought down the world economy, is there something that i am missing, i have been following Romney for the last couple of weeks, my goodness, if that is the great republican hope!!! I dont have any hope for world peace!!! or in fact the economy, this man does not know his right from his left!!! poorly advised, what happened to a once great republican party?? where are the reagans?? they have to make do with the likes of Sarah palin, very laughable!!!
18:12 September 14, 2012 by Great Scott
@Eric1

"socialist/Marxist lead by the Democrat party", isn't that the opposite to Fascist/Nazism lead by the Republican party. Oh yes, I seem to remember it was under the Republicans watch when the US banks sunk the world.
18:56 September 14, 2012 by djmarko
The republican majority house has opposed every Obama bill since 2008 hoping that will bring down his government, seems to have back fired, the US economy is in a more healthy state that the democrats found it in 2008, now the republicans dont even have a manifesto of their own except criticize every word that comes out from Obama, even if they win the elections, what are they going to do with it??
12:10 September 15, 2012 by viennacalling
Hi djmarko, that is true the democrats and the fed reserve Ben B have done a good job with what they inherited from the Bush Junior and the Republicans !

Their election is out of the way in November so from that point I can see a rise in the US economy of 2.5 % and over 3% by 2015.

Ben Bernanke just did the right thing during the week and with AIG share sales(as 1 example of His Investment) generating more return for the US taxpayer I can see a greater return in the future

I sincerely hope that the EU Leaders can Learn from Ben B´s Investment Strategy!
15:22 September 15, 2012 by cogito
@10 "the republican majority since 2008?"

Huh?

The Democrats held the Senate and the House from 2006-2010. Then the they held a super-majority in both houses during Obama's first two years (2008-2010).

Facts are pesky things, aren't they?

Time to put the big boy pants on and stop cry-babying about Bush.
07:00 September 17, 2012 by NYPatriot
People fail to remember the disasters we had during Bush's 2 terms.

2001: Tropical Storm Allison

9/11 Terror Attacks

Anthrax Attacks

2003: Space Shuttle Columbia Disaster

American Airlines Flight 587 Crash

2004: Hurricane Charley**

Hurricane Francis**

Hurricane Ivan**

2005: Hurricane Katrina**

Hurricane Rita**

Hurricane Wilma**

Evansville Tornado

2007: Hurricane Dean

California Wildfires

2008: Hurricane Ike**

** 7 of 10 of the most expensive hurricanes in US history.

Katrina was estimated to cost the same as 4 wars according to NBC, and we had 2 wars during those years.

So...I don't think our debt was necessarily all due to GW. Imagine if Obama had to deal with all of that. He's already added the same as Bush to our deficit but in half the years.

Bush went to those disaster areas afterward, as a president should. Obama squeezed a day in after hurricane Isaac, then continued campaigning.

I'd rather have another Bush.

I also think the US needs to cut corporate taxes to compete, the way Sweden is. Everyone seems to get that BUT Obama.
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