The tax law liability of the representative - new rules on exemption and scope

Mathias Tegnér (S)

Madam Speaker! Today we are debating the tax law principle of priority – an area that at first glance may appear technical but which in reality goes straight into the heart of the Swedish social model.

What is the tax law's principle of priority responsibility about? It is about justice, it is about responsibility, and it is about the trust that everyone contributes according to their ability.

Madam Speaker! Those who run a company in Sweden should know that we have a system where freedom and responsibility go hand in hand. We have low thresholds for starting and running companies, but we do not accept that one uses limited companies as a shield to evade taxes and fees.

Almost all entrepreneurs behave themselves, but at the same time we know that organized crime uses limited companies as a criminal tool. We cannot turn a blind eye to that. That is why the representative liability exists – not primarily as a punishment but as a guarantee that the rules of the game apply equally to everyone.

If some companies can avoid paying tax while others do the right thing, it is not only the state's finances that are eroded; then it is the legitimacy of the entire economy that is threatened.

In the bill that today's committee report addresses, the government proposes certain changes. Among others, a representative shall be able to be exempted from payment liability if it is considered unreasonable. A so-called "grace period" is also introduced, which is an opportunity to postpone the payment liability for two months.

There is much that speaks in favor of these proposals being reasonable. It is good that legal certainty is strengthened, and it is good that proportionality is clarified. But let us be honest, Madam Speaker: This is not alone the major reform that Sweden needs in this area. The problem today is, in the first instance, not that the rules are unclear for serious entrepreneurs. The problem is that unserious actors exploit the system – systematically, cynically, and often organized.

Madam Speaker! We see how companies are emptied, how taxes are left unpaid, how representatives are replaced and how debts are left to the state and thus to the taxpayers. This is not a coincidence. It is a business model for criminals. In that reality, it is not enough to fine-tune rules on discretion and reasonableness. A significantly more offensive work against tax evasion and tax avoidance is required.

Here the government is failing. We Social Democrats have said it before and say it again: The government has not managed to take a unified grip on tax evasion. Nor has it succeeded in addressing the gigantic black economy. According to an ESO report released earlier this year, the criminal economy turns over 352 billion every year. With this result, it is completely obvious that the government is not doing enough in this area.

Madam Speaker! The Government is happy to speak about the importance of combating economic crime. But when it comes to concrete policy, we see something else. We see a tax policy where controls are not being expanded at the required pace. We see authorities requesting more resources and better tools but not receiving enough. We see a passivity towards advanced schemes for tax evasion. At the same time, this proposal is being put forward, which in practice can make it easier to evade responsibility.

Madam Speaker! Fundamentally, we are positive about these changes to the tax law's priority of responsibility. What concerns us Social Democrats is the passivity in adjacent issues.

Let me be clear: legal certainty and effective combating of fraud are not opposites, on the contrary. A system that fails to stop fraud is fundamentally unjust, especially towards the serious entrepreneurs. It is the companies that pay their taxes, follow the rules, employ people and build Sweden that are affected when others can cheat their way to competitive advantages.

Adjusting the tax law's priority of responsibility can make Sweden a better country to do business in. But if we are to develop our industrial policy and our economic policy, it must be done in a broader perspective. A good industrial policy is not just about tax rates or individual rule changes. It is about creating an entire system where companies can grow, hire, and compete on fair and just terms.

Sweden is in many respects one of the world's most competitive countries, not despite but thanks to our collective investments in education, infrastructure, research and transition. It is also part of the Swedish model.

Madam Speaker! We know that four out of five jobs today are created in small and medium-sized enterprises in Sweden. We know that companies need capital, competence, and reasonable conditions to grow. We also know that trust, in the system and between actors, is one of our absolutely most important competitive advantages.

That trust, however, presupposes that the rules apply equally to everyone. If some can cheat with taxes, dump costs, and bypass responsibilities, not only is the tax base undermined, but the entire foundation for a well-functioning market economy is undermined.

Madam Speaker! That is why the fight against tax evasion is not in opposition to a business-friendly policy, but is a prerequisite for it. A serious business owner should never have to compete with those who cheat. An entrepreneur should be able to trust that the playing field is fair.

We Social Democrats support the development of the regulatory framework for the tax law's principle of priority. We support that there should be room for reasonableness and proportionality. But we do not accept that this bill becomes an excuse to lower the ambitions in the fight against tax evasion.

We want to continue to see stronger control functions, better cooperation between authorities, sharper tools against recurring abuse, and a clear political prioritization of securing tax revenues. We demand that the government stops sitting on its hands when it comes to issues regarding capital insurance, exit tax, and withholding tax, areas where the government's expert agencies have pointed out deficiencies that are being used for tax fraud and tax evasion.

Madam Speaker! At its core, this is about what kind of society we want. We want a society with good competitiveness characterized by trust, a society where no one can stretch the rules and get away with it, and a society where we stick together, where we trust each other and where everyone contributes. The responsibility of representation is a small but crucial part of this larger social contract.

The government's proposal is well-considered but risks being only a half step. We stand behind the bill but are concerned that the government at the same time does not take the fight against tax evasion seriously. Justice demands it, the companies that do the right thing deserve it, and Sweden needs it.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

BO BROMAN (SD)

Madam Speaker! The tax law liability is an intrusive mechanism in our tax system. It is a powerful tool where the legal entity's protected barrier is torn down and individual individuals, board members or CEOs, are held personally liable for the company's debts.

The purpose of the legislation is fundamentally sound and legitimate. We must have a system that counters unserious actors establishing a practice of letting companies go bankrupt and then handing the bill over to the taxpayers and the common good. But when the rules are as intrusive as these, extremely high requirements are also placed on them to be legally secure, predictable, and above all, reasonable.

Today we unfortunately see that personal responsibility can have devastating consequences for individuals who, under difficult circumstances, struggle to save their life's work. It is therefore pleasing that we are now considering a proposal that moves us in a more balanced direction.

Madam Speaker! Firstly, it is about clarifying the rules for exemption from the obligation to pay. It is about introducing a measure of humanity and common sense into an otherwise rigid process.

By clarifying that a representative shall be fully or partially exempted from liability if it appears unreasonable, we provide the application of the law with the tools required to conduct a fair assessment. It is also specified which circumstances in particular shall be taken into account. This means that we are moving from a solution that is supposed to fit everyone to an assessment that actually takes reality into account. Not all situations look the same, and the law must be able to distinguish between the person who acted in bad faith and the person who did everything in their power to do right by themselves.

Secondly, the possibility of so-called raw space is now being introduced. This is a change that is directly decisive for the business climate, especially in times of economic turbulence.

That a representative can apply for a two-month respite provides a necessary breathing space. In practice, it means that the assessment of personal responsibility is postponed. We know that even well-managed companies can be affected by temporary liquidity problems due to external factors. It could be late payments from customers, changed market conditions, or global uncertainty.

A grace period of two months can be exactly the margin required to have time to restructure, bring in capital, or carry out an orderly liquidation. It can be the difference between an entrepreneur being able to move on with their head held high and that person being driven into a personal financial tragedy entirely unnecessarily.

Madam Speaker! The Sweden Democrats' position is clear, namely that there must be a strong incentive to behave correctly. The stability of the tax system is based on rules being followed and that there are tangible consequences for those who abuse the trust.

But order and clarity must never be created at the expense of the legal certainty for serious entrepreneurs. We shall hunt fraudsters and organized crime, not undermine those who build our country. The system must be designed so that it hits those who deliberately abuse structures, not those entrepreneurs who have encountered temporary difficulties despite reasonable efforts.

The changes we are discussing today are an important step toward strengthening legal certainty and creating a better balance between the state's legitimate claims for tax revenue and the individual's right to a reasonable assessment. It is about safeguarding entrepreneurship in Sweden.

I therefore wish to conclude by moving for approval of the committee's proposal for a decision.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Adam Reuterskiöld (M)

Madam Speaker! It is interesting to stand here and debate roughly the same thing in several different matters, that is to say, the conditions for entrepreneurship in Sweden. Our government is doing everything to facilitate entrepreneurship and to make it as easy as possible to do the right thing.

Sweden shall be a country where it pays to run businesses. Sweden shall be a country where we are willing to take risks and where companies can create jobs. Our task as legislators is to ensure that the rules become reasonable, legally secure, and predictable – just as we heard just now.

The tax law principle of representative liability has for a long time been the opposite of exactly this and has been under discussion for a long time. For a decade, entrepreneurs, researchers, and organizations, for example Svenskt Näringsliv, have pointed out serious deficiencies. In practice, the rules have often functioned as an almost strict liability, where courts practically always rule in favor of the state and where very little consideration is taken into account regarding the circumstances in the individual case. This is not just a question of law, but this is actually a question of entrepreneurship and often personal tragedies.

Madam Speaker! The consequences of today's regulatory framework have been clear. Entrepreneurs have in practice been forced to choose between putting a company into bankruptcy and risking personal ruin. It has been a system that has driven unnecessary bankruptcies, and it has fundamentally struck against viable companies. This has also been raised by Företagarna, who have clearly described how the rules have been insecure in terms of legal certainty and bankruptcy-inducing. That is why the reform is necessary.

Madam Speaker! We Moderates stand for a clear line. It should be easy to do the right thing, but it should also be difficult to cheat. Therefore, we are now implementing important changes. We are introducing a grace period. Companies shall now be granted a two-month grace period to resolve a temporary crisis. This no longer means that one has to throw in the towel immediately, but rather one gets a chance to, for example, secure new financing, reach a settlement, and above all, save jobs.

This is a concrete reform to save viable companies. We strengthen legal certainty, and we clarify the rules for when it is unreasonable to demand personal payment liability. This means greater consideration of actual circumstances and fewer standardized assessments, and it directly addresses the criticism that the business community has had for a long time. We improve the business climate in a broader sense.

Madam Speaker! This is not an isolated reform, but this is part of Moderate policy. We lower the thresholds for hiring, simplify the tax rules and strengthen competitiveness. We know that companies are the foundation of our welfare. This is not a free-for-all, but we stand firm on the equally important principle that taxes must be paid. Those who deliberately cheat shall face clear consequences.

What do we do then to combat the abuse? We Moderates are clear when it comes to combating economic crime, Madam Speaker. Therefore, we maintain the principle of the representative's responsibility. We ensure that the room is not given where there are signs of abuse. We ensure work against tax evasion and unprofessional arrangements. It is important that we protect serious companies by facilitating fair competition and safeguarding the taxpayers' money in the best way. Otherwise, it is the serious companies that are affected when fraudsters are allowed to compete on unfair terms.

Madam Speaker! Even from liberal think tanks such as Timbro, the need to strengthen the rule of law and ensure that there are clear links between responsibility and actual guilt has been pointed out. This is about a simple rule-of-law ideal, namely that responsibility should follow from action, not from outcome.

Madam Speaker! We are now hearing objections that this would risk tax revenues. A system that forces bankruptcies and risks wiping out viable companies also reduces tax revenues. It also risks the livelihoods of those who work within the companies and the entrepreneurs themselves. It is a short-sighted policy – not a responsible policy.

Madam Speaker! The bill is about a balance between responsibility and reasonableness, between control and the business climate. We Moderates choose a line where serious companies shall be given a chance, legal certainty is strengthened, and cheating is combated. That is how we build a stronger Sweden with more jobs, more growing companies, and a stable financing of the welfare.

With this, I vote in favor of the committee's proposed decision in the report.

(Applause)

The deliberation was hereby concluded.

(Decisions were made under § 18.)

The speech at riksdagen.se, in Swedish (opens in a new tab)