Swedish private Pharmacy companies using tax havens to manage taxesWednesday, 09 November 2011
We have sort of campaigned on this network how Sweden is home for big companies that are given all types of favours by the government to the disadvantages of smaller companies that really contribute their tax money for the nation’s treasury.
Big companies and those with external background have sought out ways of avoiding taxes in Sweden and as the Swedish government bow down to them, smaller newer start - ups such as that which owns this network, will soon be going our of business because of the exorbitant costs and lack of support.
More evidence is emerging today that venture capital companies behind the creation of the growing new pharmacy chains being established in Sweden are locking their monies in tax free accounts outside of Sweden.
It holds that at the same time the government provide billions to these pharmacies in subsidy to provide prescription drugs, writes the Swedish newspaper Svenska Dagbladet.
AdvertisementThe method used to avoid or reduce taxes is based on where the parent companies behind chains are located in the tax avoidance countries. They then borrow against high-interest money to their Swedish business whose surplus would reduce or cancel out any supposed taxes that would have been expected. This makes for lower corporate taxes or none at all.
One of the examples of such pharmacy chain is Medstop. Last year, its Swedish operations, gave it a profit of Skr40 million, but the operations has received a loan from the shareholders, a venture capital fund of Skr706 million. The interest rate on the loan is 15 percent and that means Medstop has an interest expense of Skr 106 million, which eats up the entire surplus on the Swedish part.
This means that the company need not pay any corporate tax; instead, the parent company in tax haven Jesey has received income that the Swedish authorities cannot tax.
Peter Elving, chairman of Medstop, says that the company complies with the law – of course.
“Swedish tax authority is now investigating the validity of this type of financing, and we believe that we stick to the rules,” he says to Svenska Dagbladet.
On to those that have more shall be given to them and onto those that have not the little shall be taken away
By Scancomark.se Team
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