• Sweden's news in English

Sweden acts to curb corporate tax-avoidance

TT/The Local/dl · 14 Nov 2011, 17:12

Published: 14 Nov 2011 17:12 GMT+01:00

Facebook Twitter Google+ reddit

Health care company Carema Care AB as well as pharmacy operators have been criticized recently for avoiding taxes by relying on a scheme whereby the firms borrow money from a parent company headquartered in a tax haven.

The Swedish subsidiaries of the company reduce their tax burden in Sweden by claiming hefty interest payment deductions stemming from “loans” from their parent companies offered at internal, often inflated, interest rates.

At a press conference on Monday, Swedish finance minister Anders Borg revealed that the government plans to examine legislation to put a stop to the practice in the spring of 2012.

The new law will make it harder for companies to take advantage of “aggressive” interest payment deductions.

According to Borg, the new proposal could come into force as early as January 2013.

“We have no view regarding what sort of owner manages a certain type of company,” he said in response to a question about whether or not international companies would be allowed to conduct profit-making operations with the help of Swedish tax money.

“However, everyone should pay their fair share of taxes,” Borg added.

The law will apply to all commercial activity in Sweden, not just companies active in the education and healthcare sectors, something which Borg anticipated may rankle some in the business community.

“There may well be a bit of a hullabaloo about this from the private sector. But we've concluded that something has to be done,” he said.

Elderly care minister Maria Larsson was also asked about the government's views on whether international venture capital firms should be allowed to conduct profit-making operations with the help of Swedish tax money.

She emphasized that, in the government's view, it's not important what sort of company conduct any given activity, but that what matters is that the quality of the service provided is good and that the profits stay in Sweden.

“These funds, which are taxpayer money, should be used in Sweden and that will happen with this sort of preventative legislation,” said Larsson.

According to Borg, the forthcoming legislation will stop “questionable and aggressive interest rate structures” within venture capital firms.

He said the Swedish Tax Agency (Skatteverket) shouldn't hesitate to take companies with questionable interest rate structures to court in order to determine if they violate Sweden's laws against tax evasion.

The Confederation of Swedish Enterprise (Svenskt Näringsliv) welcomed news of the planned legislation.

“It's positive that the government is taking action against the tax problems associated with what we've seen recently,” Krister Andersson, a tax expert with the organization, told the TT news agency.

Public sector employees union Kommunal remained cool to the proposal, however, arguing that, while action is welcome, the government is focusing on the wrong problem.

Story continues below…

“The main problem is that there is too little money,” Kommunal chairperson Annelie Nordström said.

Social Democrat head Håkan Juholt argued that the government's proposal didn't go far enough.

“It's become clearer that an increasing number of the market-oriented experiments within schools, care, and healthcare currently being conducted in Sweden have gone off the rails,” he said.

According to Juholt, privatization of public services is costly for citizens and called for better, national guidelines.

“After these revelations, the government is now trying to plug a few holes in an experiment which actually has a number of huge shortcomings,” he said.

TT/The Local/dl (news@thelocal.se)

Facebook Twitter Google+ reddit

Your comments about this article

10:38 November 15, 2011 by Grokh
everywhere else countries dont go after companies, in fact they give them tax exemptions and tax cuts and even go to the point of paying them all while they are tax evading. and at the end of the day everyone blames school teachers or something stupid like that for economic holes.

good to see sweden is getting tougher on this issue.
11:16 November 15, 2011 by Great Scott
This crowd of incompetent moderates may sound like they are getting tough, but it's all talk as usual. This is just to make you feel they are doing something, but sadly no. Why do they want to upset their good fat cat friends? The day they bring in a minimum wage, lower taxes for the lower paid and get rid of the atrocious phase 3 program (that will create more jobs), I may start to believe in them.
02:21 November 24, 2011 by clacke
What? Sweden has minimum wages, they are just stipulated in frame deals between collective organizations rather than in law. In general, Swedish minimum wages are higher than the EU norm. And this government has been lowering taxes from day 1, for lower paid and higher paid people. This is about the personal tax burden, right, not about jealousy?
Today's headlines
Meet Sweden's lonely Donald Trump voter
A Donald Trump campaign button. Photo: Rogelio V Solis/AP

The Local talks to an American Donald Trump supporter on what it is like living in progressive stronghold Sweden.

Forgotten Ingmar Bergman script to be made into a film
It's thought the script was part of an ill-fated collaboration between Bergman (left) and Federico Fellini (right). Photo: AP

Written in 1969, the script is 'up to the standard of his best', according to the Ingmar Bergman Foundation.

Sweden's consumption footprint 'among the worst'
Trucks transporting goods on a Swedish highway. Photo: Fredrik Sandberg/TT

Sweden has been criticized for its unsustainable consumption of the planet's resources in the latest edition of a major WWF study.

Video: How to be Joel Kinnaman for a day
Kinnaman with one of the camera rigs that will allow people inside his head. Photo: Tele2

The Swedish Hollywood actor will strap a camera to his head, stream it live and allow viewers to interact with him this weekend.

Presented by Invest Stockholm
How Stockholm's cold climate boosts creativity
Photo: Ola Ericson/imagebank.sweden.se

Do long, dark winters actually make Swedes more creative and more productive? We spoke to Stockholm startups to find out.

Sweden to keep record-low interest rate in 2017
Sweden's landmark negative interest rate will continue towards 2018. Photo: Anders Wiklund/TT

The Swedish central bank said that it will take longer than expected to reach its inflation target.

Presented by Stockholm University
9 unexpected programmes at Stockholm University
Photo: Niklas Björling

Did you know Stockholm University offers 75 master's programmes taught in English? And some of them are programmes you won't find anywhere else...

Creepy clown messes with the wrong dog walker in Sweden
Not the clown in the story. Photo: Pontus Lundahl/TT

A dog helped its owner fight off a creepy clown chasing the pair in southern Sweden.

A million Swedes are digitally excluded: report
How should Sweden bridge the digital divide? Photo: Henrik Montgomery/TT

Tech-savvy Swedes? Perhaps not. A new study suggests that at least a million of its residents feel the pain of the digital divide.

Malmö's 19th Swedish title sets Champions hopes alight
Malmö fans celebrating after the match. Photo: Björn Lindgren/TT

Malmö FF have their eyes set on the Champions League after winning the Swedish league for the 19th time.

Sponsored Article
One expat's strategy for making friends in Stockholm
People-watching: October 26th
Sponsored Article
Nordic fashion in focus at Stockholm University
Sweden cuts 2016 refugee forecast
Is Game of Thrones coming to Sweden?
Blog updates

6 October

10 useful hjälpverb (The Swedish Teacher) »

"Hej! I think the so-called “hjalpverb” (auxiliary verbs in English) are a good way to get…" READ »


8 July

Editor’s blog, July 8th (The Local Sweden) »

"Hej readers, It has, as always, been a bizarre, serious and hilarious week in Sweden. You…" READ »

Sponsored Article
Stockholm: creating solutions to global challenges
Property of the week: Kungsholmen, Stockholm
Sponsored Article
Last chance to vote absentee in the US elections
Will Swedes soon be looking for fairtrade porn?
The Local Voices
'I simply don’t believe in nationality'
Why we're convinced Game of Thrones is based on Sweden
Sponsored Article
This is Malmö: Football capital of Sweden
People-watching: October 21st-23rd
Sponsored Article
Where is the Swedish music industry heading?
Fury at plans that 'threaten the IB's survival' in Sweden
Analysis & Opinion
Are we just going to let half the country die?
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
Angry elk chases Swede up a lamp post
Sponsored Article
Swedish for programmers: 'It changed my life'
The Local Voices
'Alienation in Sweden feels better: I find myself a stranger among scores of aliens'
People-watching: October 20th
Sponsored Article
Top 7 tips to help you learn Swedish
The Local Voices
A layover at Qatar airport brought this Swedish-Kenyan couple together - now they're heading for marriage
Sponsored Article
‘Extremism can't be defeated on the battlefield alone’
Swede punches clown that scared his grandmother
Sponsored Article
Stockholm: creating solutions to global challenges
Fans throw flares and enter pitch in Swedish football riot
Sponsored Article
Why you should 'grab a chair' on Stockholm's tech scene
Could Swedish blood test solve 'Making a Murderer'?
Sponsored Article
Where is the Swedish music industry heading?
Swedish school to build gender neutral changing room
Sponsored Article
One expat's strategy for making friends in Stockholm
People-watching: October 14th-16th
Sponsored Article
Nordic fashion in focus at Stockholm University
Man in Sweden assaulted by clowns with broken bottle
Nobel Prize 2016: Literature
Watch the man who discovered Bob Dylan react to his Nobel Prize win
Record numbers emigrating from Sweden
People-watching: October 12th
The Local Voices
'Swedish startups should embrace newcomers' talents - there's nothing to fear'
How far right are the Sweden Democrats?
The Local Voices
Syria's White Helmets: The Nobel Peace Prize would have meant a lot, but pulling a child from rubble is the greatest reward
jobs available