Sweden sued by EU over property sales tax
AFP/The Local · 24 Jul 2007, 16:34
Published: 24 Jul 2007 16:34 GMT+02:00
The commission has decided to open a new infringement procedure against Sweden because even though the law was changed, legislation still favours those buying or selling a property in Sweden rather than elsewhere in Europe, the commission said.
Under current Swedish rules, people selling a home in Sweden can defer payment of capital gains tax on the profit, as long as the money is used to buy another home in Sweden. People using the money to buy a home in another country, including in other member states of the European Union, are liable to pay the tax in full when the property is sold.
"The rules of the Internal Market forbid any restriction of the free movement of persons between member states" said EU Taxation and Customs Commissioner Laszlo Kovacs.
"A person who sells his house or apartment in any Member State should not be discriminated because he has made use of his right to free movement and bought an apartment in a State other than Sweden," he added.
Separately, the EU has stepped up legal proceedings versus Sweden for its "restrictive rules on income tax applied to non-resident tax payers".
It has sent a reasoned opinion – the last stage in the EU infringement procedure before court action – asking it to comply with European tax legislation.
The commission said it considers that the Swedish position on taxation of non-residents is not legal as a non-resident who receives all, or almost all, of their income from Sweden does not have the same right to make deductions from mortgage repayments as a Swedish resident.