<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=959086704153666&amp;ev=PageView&amp;noscript=1">

Committee’s proposal for a financial sector tax is scrapped

PwC-skatteradgivning-Meeting-solid_0002_burgundy.png ‹ Back to the articles

PwC-skatteradgivning-Meeting-solid_0002_burgundy.pngLast week the Swedish Government announced that it will not proceed with the current investigative committee’s proposal for a tax on the finance sector, but will continue to work with a proposal for a tax on banking services. The new investigation is to lead to a proposal for a pure bank tax uniform with EU law.

On 7 November 2016, the ”Committee on tax on the finance sector” presented its final report with a proposal aimed at reducing the tax advantages in the finance sector incurred due to the exemption of VAT on financial services. The Government’s ambition has been to ensure a larger contribution from the banking sector to public finances through a special tax of 15 percent on salary costs in companies selling VAT exempt financial services and insurance services.

The Swedish Government Offices have now concluded the preparatory process where, on the basis of a number of consultation replies, it has been shown that the proposal could have unintended consequences for, amongst others, mutual life insurance companies and the quickly growing financial technical sector. The political parties in the Government and The Left Party have, as a result, agreed not to continue with the proposal in the current circumstances.

At the Government’s press conference last week, it was seen that there is hope for such a proposal to be in place prior to the 2018 elections. The possibility of us seeing such a proposal by that time is deemed to be limited as such a proposal can, most likely, require a state aid investigation by the EU. At the same time, it can be noted that the Ministry of Finance will shortly distribute for consultation a proposal implying that the fees for resolution reserves be increased.

Comments

In spite of the Government choosing not to go further with the investigation’s proposal, the work in producing a proposal to reduce the banking sector’s so-called tax advantages will continue. Consequently, it can be concluded that some form of tax on the financial sector will, probably, be introduced at some point in the future.

Lennart Staberg and Ida Skog

Do you have any questions on corporate taxation?

Lennart Staberg

Lennart Staberg

Lennart arbetar med svensk och internationell beskattning som rör finansiella företag, bland annat försäkringsföretag. Han arbetar även med att biträda företag vid taxeringsrevisioner och skatteprocesser. Tidigare har Lennart varit föredragande i Skatterättsnämnden.
010-213 31 69
Lennart Staberg works with Swedish and international taxation relating to financial companies, including insurance companies. He also assists companies with tax audits and tax litigation. Lennart used to make presentations for the Revenue Law Commission.
+46 10 213 31 69

Leave a comment

Related articles

Read the article

Disagreement on whether Swedish interest deduction rules are compatible with EU law

Unlike the European Commission, the Swedish government is of the view that the interest deduction limitation rules on related party debt, ...

Read the article
Read the article

Swedish tax withholding obligations for foregin companies

Non-Swedish companies which have employees or board members resident in Sweden and who performs part of the work time in Sweden will have a ...

Read the article
Read the article

Sweden introduces mandatory tax withholding on foreign companies’ invoices for work performed in Sweden

New regulations on tax withholding came into force on January 1, 2021. Swedish companies will be obliged to withhold tax at source on ...

Read the article