EU takes Sweden to court over pensions discrimination
The European Commission said it is taking Sweden to the EU's highest court, the European Court of Justice, over alleged tax discrimination against foreign pension funds.
Under Swedish law, according to the commission, the taxation of premiums paid by employers for pension insurance taken with insurers established in other EU member states or in countries in the European Economic Area are "treated less favourably" than contributions to domestic schemes.
In the former case, Sweden taxes the contributions made by the employer companies as salary, and the later pension payments are tax exempt; in the latter case, the initial contributions are tax exempt, and only the later pension payments are taxed.
It added that the legislation "clearly restricts" the possibilities for insurers established elsewhere within the EU or EEA to sell policies in Sweden and also dissuades employers from subscribing to foreign insurance policies.
It argues, therefore, that the laws flout EU rules on the free movement of persons, of the provision of services and of capital.
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Under Swedish law, according to the commission, the taxation of premiums paid by employers for pension insurance taken with insurers established in other EU member states or in countries in the European Economic Area are "treated less favourably" than contributions to domestic schemes.
In the former case, Sweden taxes the contributions made by the employer companies as salary, and the later pension payments are tax exempt; in the latter case, the initial contributions are tax exempt, and only the later pension payments are taxed.
It added that the legislation "clearly restricts" the possibilities for insurers established elsewhere within the EU or EEA to sell policies in Sweden and also dissuades employers from subscribing to foreign insurance policies.
It argues, therefore, that the laws flout EU rules on the free movement of persons, of the provision of services and of capital.
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