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How some 1.206 Swedish Big Corporation get away with paying no taxes or very little taxes if they like to pay

Sunday, 18 March 2012
The argument has always been that big corporations will employ more people and contribute more to the state treasury in the way of increased tax intake. This is one of the reasons why Sweden is so observed with big corporations  and would do all to pursue them weakly when it come to checking if they are paying their fare share of taxation…Right? Wrong!

It has now been exposed that that one third of Swedish group of big companies (that is some 1.206 companies) pay nothing or very little in corporation taxes.  Swedish television has once again exposed this racket carried out by the Swedish big companies that pay their bosses astronomical salaries and bonuses but know all the tricks in dodging taxes.

Swedish television identified  four groups that pay more than three billion in corporate taxes in Sweden in 2010: TeliaSonera - Skr4.366 million, Astra Zeneca - Skr4.242 million, H & M Skr3.993 million and  State owned energy company, Vattenfall Skr3.509 million.

In the bottoms of the list are seven groups of companies that pay no income tax at all or if they happen to pay they pay very little.  They are Atlas Copco, Nordstjernan, Sandvik, SCA, Securitas, Volvo AB and Volvo Car Corporation will pay nothing or very little in corporate taxes in 2010 despite the fact that all corporations reporting a profit for its shareholders in the same year.

No group is under investigation for fraud, which according to the report is contrary to the law relating to the Swedish tax laws.

Creative accounting has been used in many big corporations in the developed countries especially in the big corporation in the countries such as the UK, USA and now publicly acknowledged in Sweden. This has led to increased bleeding of the treasury in favour of the few wealthy individuals, smaller businesses and kills competition.

When the USA president, Barack Obama, for example identified these loopholes in the corporate tax systems and proposed that the wealthy corporations and individuals in the US who might have benefited from such tax loop holes pay more in taxes and proposed what became known as the Buffet role, after Warren Buffet who openly criticised the American tax system that made it possible for the wealthy to get away with virtually no taxes, the President was attached for waging war against the wealth creators.

But studies also in the USA showed that as the big corporations where getting richer, job creation to reflect their argument of wealth creation was not there. Whereas smaller companies and the middle class were going out of business because of the heavy tax burden heaped on them.

Similar situation has been observed in the UK and also in Sweden. In Sweden heads of the country’s biggest banks and corporations such as Ericsson, Astra Zeneca, Atlas Copco, Sandvik, SCA, Securitas, Volvo AB etc., have been well rewarded in pay and bonuses but these companies have not created the large amount of jobs that one would associated with an environment that is creating more wealth. Instead these companies that have benefited from the best skills developed in Swedish schools, some of the best healthcare for them and their worker, good transport systems, proper security for their huge wealth and their that of their companies as well as their huge financial transactions, just to name these have bet not needed to pay taxes in the country.

Had we seen these companies ploughing back some of these huge tax gains to create jobs, support smaller companies which will on the whole, put more people back to work and thereby reduce government spending in the way of reduced social benefit payments, it could be acceptable that these companies could get away with these tax loot. But they are instead looking for cheaper labour from Eastern Europe and outsourcing production to cheaper South East Asian countries.

It is the first time a public review has been carried out on Swedish largest companies and we are not sure if the study has been driven by our persistent cried on this network about the over-taxation of smaller companies in this country. Last year we wrote a lot about how Swedish smaller companies are over pressured by the state and that the big Swedish companies got away with almost everything. We also wrote directly on issue relating to that the Swedish government is over obsessed with the big companies at the detriment of smaller ones.

Some of the feed backs we received from anonymous sources then accused us of waging a campaign against big corporations because we had a platform to publish what ever we deemed. We were also accused of lacking the skills of developing our own organisation to grow – maybe because we did not know hoe to play the tax system.

Apparently, Swedish television also has a platform to publish what ever they like.

All the companies that have paid no taxes say they followed the laws but they are right because no one has pursued them from the Swedish tax authority. Therefore their books were seen as clean.
The OECD, the organization representing the Western, industrialized countries have adopted new guidelines urging companies to do the right thing. It is not enough to follow the law, but the OECD presses the companies to follow the intentions of the legislation.
By Team

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