Swedish tax rules slammed

The European Commission has formally threatened Sweden with legal action at
the European Court of Justice , alleging its accounting rules for foreign
European Union financial services firms selling into Sweden are illegally tough.

Brussels says Sweden’s law 2001:1227 on tax returns and tax information
breaks its EU treaty commitments underpinning the freedom of services and
capital movements across the EU.

The national law makes substantial reporting demands on foreign financial
institutions, which the EC says ‘dissuades them from marketing and providing
cross-border services to customers resident in Sweden’.

When they actively market services in Sweden from offices in other EU
countries, foreign financial institutions have to provide Sweden’s tax
authorities with detailed annual statements on their business with Swedish

This involves the value of all the assets placed with the foreign
institutions, as well as interest, dividends and other income received from, and
interest paid to, the institutions. These ‘onerous reporting requirements’
illegally limited financial services in Sweden, said the EC.

It also noted that although EU law provides for exchange of tax information
between member states’ public authorities in cases of suspected tax evasion,
requesting information direct from businesses ‘on a regular, comprehensive,
annual basis, is not covered by EU legislation and appears unjustified.’

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