The Swedish Government to review loopholes in the country's corporate tax lawThursday, 12 January 2012
The Swedish government is self-critical after it was revealed that big corporations through a loophole in the law could ferry away large sums in taxes.
The Ministry of Finance believes that the problem is partly due to the high Swedish corporate tax rate according to the Swedish business daily Dagens Industri.
AdvertisementThe simple principle of taxation which states that taxes should be levied in such a way that it could be easy for the payer to pay is not being applied in practice by those who use economic principle to run the economy. The taxes are levied to high, people will look for ways to dodge taxes – simple common sense.
The government expected that the new law of 2009 would provide Skr7 billion in new tax revenues. But the law that would was expected to close loopholes in the rules have flopped.
Large companies have continued to conjure away the Swedish corporate tax rate by borrowing money from another group of companies registered in Cyprus. Since then the companies would get away with at least 10 percent tax on interest income.
The Swedish Finance Ministry now admits shortcomings and that the law must be supplemented.
"We flew the flag for this problem already in 2009. We have been working flat out on the issue. There are still weaknesses in the tax structures and therefore there is reason to undertake a review, "said Anders Borg's State Secretary Hans Lindberg to the paper.
He adds that the Government intends to return to the issue in the spring and that a tightening of the regulatory framework should be combined with a reduced corporation tax.
By Scancomark.se Team
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