Arlanda Express profits paid to tax haven in Luxembourg


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Tuesday, 21 June 2011
Arlanda direct rail transport system, made record profits last year thanks to government subsidies. But the profits did not stay in Sweden. Instead it ended up in ends up in tax haven of Luxembourg.

Arlanda Express, train network that like Stockholm Central and Arlanda airport, has received hundreds of millions of Swedish government interests in subsidies.
But much of the money has gone to the pay dividend to the current owner, the Australian private equity firm Macquaire, reports Swedish daily Svenska Dagsbladet on Tuesday

Macquaire took over the Arlanda Express in 2004 for Skr400 million. The operating company in Sweden is called MEIF Stockholm AB, owned by the Luxembourg-registered fund Macquaire European Infrastructure Fund.

Profits from the Arlanda Express traffic is routed to Luxembourg under private equity standard model.
First they take out the high interest of the operating company, often twice as high as market interest rates.
Secondly, the high interest burden reduces the taxable profits of the Swedish company.
 And thirdly, the interest income is taxed in tax havens and passed then on to the owner of the company.

According to paper, MEIF Stockholm AB has since 2004 sent Skr390 million in interest payments to the parent company in Luxembourg. Now the Swedish tax authority is calling for half the money to go back to Sweden to tax coffers.

Swedish tax authority argues that the interest paid to MEIF Stockholm which is transferred to the parent company is too high. It should be 7 percent instead of 13 percent, says Tax Office.

That would mean that earnings for MEIF Stockholm has been Skr180 million higher. The Swedish state has thus lost Skr36 million in tax revenue according to the reports.

The dispute between MEIF and the Swedish Tax authority, which is about this rate of interest, is now awaiting the resolution of the County Administrative Court.
Social Democratic economic policy spokesman Lars Johansson thinks that the situation is serious and wants to contract with the Arlanda Express review.
By Team

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