The Swedish Tax Agency’s special controls in 2020

Personal expenses, undeclared benefits and the cleaning and transport sectors. These are the areas that the Swedish Tax Agency will have extra focus on during 2020.

Every year, the Swedish Tax Agency selects some sectors and areas for special control. The purpose with these controls is to reduce errors and fraud that have a negative impact on society. On 11 February 2020, the Tax Agency announced that the following areas have been selected for special controls this year:

• personal expenses and undeclared benefits
• the cleaning and transport sectors
• identity fraud
• international control and money laundering.

Personal expenses and undeclared benefits in companies

The Tax Agency will focus on reviewing personal expenses and undeclared benefits in companies. According to the Tax Agency, the most common reason for increased taxation of small and medium-sized companies is that they provide incorrect information about personal expenses and benefits. 39 percent of the companies make these mistakes and the Tax Agency estimates these tax filing mistakes to approximately SEK 8 billion per year. The typical mistakes can include deductions of personal expenses that are not business-related or that people do not declare benefits.

For that reason, the Tax Agency will be increasing its focus on reviews of company-owned cars and properties with high benefit values. Personal expenses will also be reviewed, such as travel, boats and renovations.

Labour market crimes in the cleaning and transport sectors

Tax Agency will review the cleaning and transport sectors particularly this year. In the cleaning sector, companies that clean large company offices and public facilitieswill be targeted. The purpose of the special controls is to counteract undeclared work, illegal labour, false invoices and false salary information.

Identity fraud

The Tax Agency intends to continue focusing on identifying fraud in order to reduce incorrect payments from the welfare system. Identify fraud can include incorrect civil registration, fake employment certificates and false ID documents. The Tax Agency cooperates with several other authorities to prevent these crimes.

International control and money laundering

Last year, new interest deduction rules were introduced to counteract extensive cross-border tax planning with interest deductions. Compliance with these rules will therefore be checked for the first time this year. According to the Tax Agency, if extensive tax planning is still taking place it will be discovered at an early stage in light of the information provided by the new adviser reporting requirements introduced in 2020.

Fake emigration will be reviewed with the aim of identifying individuals claiming to have emigrated but who still reside in Sweden or have business connections with Sweden and use a fake address to lower or avoid taxation in Sweden. Endowment insurance will continue to be reviewed in light of their use for tax evasion.

The Tax Agency is working actively to counteract money laundering and new legislation from 2019 has provided more opportunities for investigating and identifying suspicious transactions, behaviours and activities.

Comments

The Tax Agency’s controls can be carried out by selecting some tax returns for review and asking further questions. For companies, the Tax Agency’s controls may also take the form of tax audits, whereby the Tax Agency examines the company’s bookkeeping and documents more closely.

If you have any questions or concerns about how you can reduce the risk of error in both your personal and company tax returns, please don’t hesitate to contact us.