Attempted tax dodge ends up costing Swedish firms dearly

Several hundred Swedish companies will have to pay back a total of half a billion kronor ($70 million) in back taxes after having moved funds to Cyprus in order to evade taxes, reported Swedish Television (SVT).

At the suggestion of unscrupulous tax advisors, many Swedish entrepreneurs have been lured into transferring their profits to a holding company in Cyprus and then borrowing an equivalent amount back home in Sweden.

During a raid of the consulting office by the Swedish Tax Authority (Skatteverket), authorities discovered information that revealed that more than 400 individuals had used the same scheme.

Since it has come to light that their companies in Cyprus were just a smokescreen, the companies involved have been slapped with back taxes.

“Most of them are flimsy set ups without any real business behind them. In those cases, we suspect that it might be a question of tax evasion,” Jan-Erik Bäckman, head of analysis at Skatteverket, told SVT.

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