'Taxfree bartender' stirs Swedish class debate
Published on: 28 Nov 2012 16:54 CET
“This was a borderline case and we decided to be generous in our interpretation,” Tax Authority (Skatteverket) legal expert Pia Blank Thörnroos told the TT news agency.
“A bartender is the furthest we’ll go.”
The centre-right government coalition introduced the "RUT-avdrag" reform in 2007. It allows tax deductions within cleaning, maintenance and laundry (Rengöring, Underhåll och Tvätt, which is where the acronym comes from).
"We introduced the reform to make under-the-table jobs into proper work, with employment security and pension contributions," Moderate Party MP and Parliamentary Tax Committee chairman Henrik von Sydow told The Local.
In 2010, the tax authority calculated that the reform had created the man-hour equivalent of 5,000 jobs.
"We're happy with the reform. Many people are in favour of it and it is often cited as one reason why Swedes are more positive to paying taxes than they were before," von Sydow added.
However, as RUT was intended for "core household services", the bartender case has raised eyebrows.
"It is up to the Tax Authority to make the judgment of what is tax deductible," von Sydow said.
Following news about the bartender, Swedish media quickly uncovered several other borderline deductions claimed as household services.
For example, another events planner tells prospective customers they can deduct part of the cost for kids' birthday parties.
“It’s covered by RUT if you register it as 'taking care of children', which is what it is,” a company representative told Sveriges Television (SVT).
According to the tax agency's website, activities covered by RUT include hiring a cleaner or nanny (see full list in link below).
RUT has frequently been the subject of infected political debate. Left-leaning commentators argue that it entrenches the class system in a society which once prided itself as a champion of equality.
"When it was introduced I thought it was a joke," cartoonist Mats Jonsson at the political satire magazine Galago told The Local.
"It signalled that society was heading in the wrong direction.”
Jonsson fears the current debate could 'skew the perspective'.
“RUT is absurd in and of itself but when it is applied to bartenders, clowns and jugglers, then getting tax deduction for cleaning and child care seems normal."