Major tax blow for Volvo Cars

The National Tax Board of Sweden has ruled that Volvo Cars owes 780 million kronor in unpaid taxes, having sold its products to distributors in four export markets at an unacceptable discount price.

After a year-long investigation the tax board concluded that Volvo’s pricing was unproblematic in all countries bar four: Finland, Thailand, Taiwan and Singapore.

According to the tax authorities, the methods used by the company run counter to international agreements on internal pricing.

Volvo made large gains from its pricing policy in these four countries, according to tax board accountant Per Johan Åseskog.

“While they have paid taxes in these countries, on the whole they have made money by paying less on customs and other charges,” Åseskog told Sveriges Radio.

In addition to the 780 million kronor owed for the years 2004 and 2005, the company has to pay an extra charge of 50 million kronor.

Åseskog was not able to estimate the extent to which other car manufacturers had used the same method to keep prices down in these four countries.

“We have no insight into that,” he said.

It is not yet known whether Volvo Cars will appeal the tax board’s decision

“It’s not decided yet. We have to discuss it with our owners first,” spokeswoman Katarina Paulsson told news agency TT.