Political
Economy
Reduction in the Swedish corporate taxes is one of the major initiatives in the budget for 2013. But few people are reported to like the move. One reason for heavy feeling about that is that companies which are already advanced in tax planning will mean that much of the money will be passed to owners supposedly based abroad.
Industrials bodies warn the government who is making the proposal to be cautious about such moves.
The Swedish Governing parties have agreed on a sizeable reduction in the corporate tax rate.
"A key driver has been that Britain has lowered corporate taxes significantly, despite the country's budget problems and that in Sweden we have companies that can relocate there," says People's Party's economic-policy spokesperson, Carl B Hamilton.
The Swedish corporate tax rate is now 26.3 percent. Britain plans to reduce its own by 2014 to 22 per cent, just below the EU average.
Hamilton does not want to reveal what the Swedish level would be but it is known that the Finance Minister, Anders Borg (Moderate) will use Skr6.3 billion he hopes to get in on the tightening of tax planning with the so called interest turbines. It is enough to decrease the taxes down to 24.5 percent. The reduction could still be greater than that.
According to various reports, experts in the industrial sector describe the move as an expensive alternative with limited effects.
In an analysis some 39 percent of small businesses started since 2006 will not be affected by any tax cuts and averagely, small businesses might just gain a few hundred per month. It comes home to the fact that Sweden is again constricting the growth of small businesses while giving big businesses the ways to such the economy dry.
Confederation of Swedish Enterprise's tax expert Johan Fall believe that lowering corporate tax encourages investment, but he estimated that it will costs four times more per percentage than a reduction in the capital gain tax.
He also sees a risk that much of the money cut will be ferried abroad, when all foreign companies operating in Sweden take home their taxable profits.
"If instead capital gained taxed are reduced Swedes would benefit and we could get more new entrepreneurs."
Some authorities such as Invest Sweden, believe that to promote foreign investment in Sweden, corporate tax cut may be important. It points that it is important for Sweden to reduce its corporate taxes when the corporate tax rate in Sweden's competitors such as Denmark or Finland go down. In that vein the organ stress that Britain, by all means will cut its taxes and this will mean flight of Swedish entrepreneurs there.
However, there is fear that Sweden should not stand out as a low tax zone for it might attract the wrong types of investors. An example id pointed to Ireland which branded itself as a country with low corporation tax. This exposed the country to a certain type of company that could quickly move on.
by Scancomark.se Team
Sweden to lower corporate taxes but fear is that much of it could be ferried abroad
Sunday, 02 September 2012Reduction in the Swedish corporate taxes is one of the major initiatives in the budget for 2013. But few people are reported to like the move. One reason for heavy feeling about that is that companies which are already advanced in tax planning will mean that much of the money will be passed to owners supposedly based abroad.
Industrials bodies warn the government who is making the proposal to be cautious about such moves.
The Swedish Governing parties have agreed on a sizeable reduction in the corporate tax rate.
"A key driver has been that Britain has lowered corporate taxes significantly, despite the country's budget problems and that in Sweden we have companies that can relocate there," says People's Party's economic-policy spokesperson, Carl B Hamilton.
The Swedish corporate tax rate is now 26.3 percent. Britain plans to reduce its own by 2014 to 22 per cent, just below the EU average.
Hamilton does not want to reveal what the Swedish level would be but it is known that the Finance Minister, Anders Borg (Moderate) will use Skr6.3 billion he hopes to get in on the tightening of tax planning with the so called interest turbines. It is enough to decrease the taxes down to 24.5 percent. The reduction could still be greater than that.
According to various reports, experts in the industrial sector describe the move as an expensive alternative with limited effects.
In an analysis some 39 percent of small businesses started since 2006 will not be affected by any tax cuts and averagely, small businesses might just gain a few hundred per month. It comes home to the fact that Sweden is again constricting the growth of small businesses while giving big businesses the ways to such the economy dry.
Confederation of Swedish Enterprise's tax expert Johan Fall believe that lowering corporate tax encourages investment, but he estimated that it will costs four times more per percentage than a reduction in the capital gain tax.
He also sees a risk that much of the money cut will be ferried abroad, when all foreign companies operating in Sweden take home their taxable profits.
"If instead capital gained taxed are reduced Swedes would benefit and we could get more new entrepreneurs."
Some authorities such as Invest Sweden, believe that to promote foreign investment in Sweden, corporate tax cut may be important. It points that it is important for Sweden to reduce its corporate taxes when the corporate tax rate in Sweden's competitors such as Denmark or Finland go down. In that vein the organ stress that Britain, by all means will cut its taxes and this will mean flight of Swedish entrepreneurs there.
However, there is fear that Sweden should not stand out as a low tax zone for it might attract the wrong types of investors. An example id pointed to Ireland which branded itself as a country with low corporation tax. This exposed the country to a certain type of company that could quickly move on.
by Scancomark.se Team
Scancomark.com
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