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Different laws in various EU operating sectors  andcompeting fees threatens Swedish firms

Sunday, 19 May 2013
Swedish construction and transportation sectors have been calculated to be worst exposed to the effects of extreme competition and distortion from various EU tax rules and fees. The effect is that it could heavily affect Swedish businesses and companies as they try to be more competitive.

Using the tax systems from different EU countries and various form of fees companies in Sweden will almost halve their labour costs. This creates distortions of competition and is a threat to the Swedish companies, those that pay their taxes at home in Sweden.

This is the assessment of the Swedish labour organisation, LO as it addresses the problem in a report to be released tomorrow. The new LO report shows how companies can use the EU's freedom of movement in order to create packages with lower taxes or no taxes at all.

For example, a company operating in Sweden be registered in Ireland and recruit workers from Poland, according to Claes-Mikael Jonsson, a lega expert in LO.

"You pay payroll taxes in Ireland for 12 percent, compared with 32 percent in Sweden. And, in Poland the income tax a customs fee, it is up to the employee to pay it. What we see when we meet with these workers is that there end up with no tax paid in Poland," said Claes-Mikael Jonsson.

Companies can thus reduce their costs properly without violating Swedish collective agreements. As the agreements, governing the gross wages meets such in other countries.

The construction  and the transport sectors are most exposed according to  Claes-Mikael Jonsson who also indicates that the sector are in trouble.

"The transport sector is falling south because of this type of competition," says Claes-Mikael Jonsson.

In the construction industry, officials such as Jens Hoffmann, managing director of construction company Dipart, says this competition means that they cannot compete.

"We can not compete against this kind of business. Even now, we have changed our business models such that even fir a simple job, we not compete because our wages are too high. Instead, we take the more advanced jobs," says Jens Hoffmann.

In such circumstances, Swedish companies that are exposed will according to LO to eventually lead to a downward pressure on wages and that the Swedish tax revenue will disappears.

Besides this LO is also looking at working environment and the safety of those who come here from other countries to work. Employers would exploit them for they know that these new workers don't understand what their rights are and how teh working systems and safety rules are.

"There are many who come to Sweden to work in the construction industry. The work environment is reprehensible, wages are unreasonably low, breaks and holidays are not honoured if at all," says Jens Hoffmann.

To prevent this, LO is pressing on new law that allows the main contractor to have full responsibly  for subcontracting a project  and also manages taxes correctly.
LO also urges the government to work more closely with other EU countries to ensure that taxes are actually paid in the different countries.
by Scancomark.com Team

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