Finance Minister Anders Borg wants to end aggressive tax planning. Photo: Henrik Montgomery/Scanpix
crackdown on tax havens

Borg takes aim at corporate tax evasion

Finance Minister Anders Borg presented a proposal Friday to stop big companies using a loophole for tax dodging. The Swedish Tax Authority has shown that large venture capital firms in the fields of health, medical care and education are not paying corporate tax, despite healthy profits.

The companies avoid the tax by borrowing money from other companies within the same group at exorbitant interest rates. The high interest can be deducted from the the group's other taxable profit.

This costs the Swedish state hundreds of millions of dollars each year

According to Borg, the proposal will end the possibility to use tax havens or carry out "aggressive tax planning". A few adjustements to an earlier proposal have been made, which according to Borg is legally secure.

Speaking at a press conference Friday morning, Borg said "The plan is that Parliament will pass the proposal this autumn so it can enter into force on January 1, next year."

Borg also said he is open to lowering the corporate tax by about US$ 830m, the same amount the Government expects to gain by bringing in today's proposal.

"We have budget talks first, but I think we need a corporate tax level that makes it attractive to invest in Sweden."

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