What goes around comes around – How the  US action on tax evasion is stressing up Swedish bankers


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Wednesday, 11 May 2011
Swedish bankers are disturbed that Barack Obama’s police to chase American tax evaders around the world would after them in several ways and are disgusted about the idea.  But is this not the same thing Sweden is doing - signing various treaties with so called tax havens?

The borne of contention for Swedish banks is that the American move could be very expensive for Swedish banks and would make Swedish banking secrecy blown wide open according to a report in the Swedish business daily, Dagens Industri.

In March last year, US president Barack Obama sponsored a new law that gave the U.S. Internal Revenue Service (IRS) new powers to collect taxes from foreign residents in the USA.


The law requires all foreign banks to report yearly data on their customers to the IRS. The bank customers affected are American citizens, people with work permits in the United States and companies with at least 10 percent American ownership, according to the paper.

This has ignited criticism from the Swedish Bankers Association's tax lawyer Marie Rosvall.
"This will mean that the Swedish banks, like other non-American banks, be hit by an extreme administrative burden, "said Marie Rosvall, who is also chairman of the European Banking Association's tax committee, to Dagens Industri.

She believes that it will be an almost impossible task for a major bank to go through their entire customer base and calls the requirements unreasonable.
This would mean that Swedish banks may need to change their computer systems and hire new employees to handle the task.

But she also points that ignoring the American request can be very expensive. Then the U.S. authorities would be required to withhold 30 percent tax on all transactions pertaining to the U.S., such as dividends and asset sales, write Dagens Industri.

Sweden has been chasing tax evaders in the past years and has been signing agreements with tax havens. It looks like the Americans are also doing the same with people who earn in the USA and tend to move their takes aboard. That is why we thought that it is what goes around comes around – not in a bad way though.
By Team

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