New rules on value-added tax for small businesses and amended rules for certain services and works of art
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns legislative changes to harmonize Swedish value-added tax with EU directives. S supports the proposal to raise the turnover limit for tax exemption to 120,000 kronor and simplify invoicing for small businesses 1. S wants, however, a more uniform VAT rate and a comprehensive review of the tax system to ensure stable revenues for welfare 1 2 3. S argues that the government's budget proposal favors the rich 1. M emphasizes that the government's proposal improves and simplifies things for small businesses and sole proprietorships, which are important for growth 4. M emphasizes the importance of the tourist VAT and the food VAT 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Marie Olsson (S)
Mr. Speaker! This report concerns legislative changes made on the grounds of decided amendments to the EU's value added tax directive. In the report, it is proposed that the turnover limit for value added tax be raised from 80,000 to 120,000 kronor and that companies established in other EU countries are given the opportunity to apply the turnover limit even in Sweden. Companies established in Sweden are given the opportunity to apply exemptions from tax liability in other EU countries.
More shall also be allowed to issue a simplified invoice, and certain virtual arrangements and activities shall be taxed in Sweden if the buyer is located in Sweden.
Finally, the current limitation regarding the reduced tax rate on the sale of artworks shall be removed and the tax rate of 12 percent shall apply to all sales of artworks, except that it may not be applied in conjunction with the rules on profit margin taxation.
This may seem like a potpourri of different issues regarding value-added tax, but they are connected in that they all concern harmonizing Swedish legislation with the EU's value-added tax directive.
We Social Democrats support the proposal in the committee report and have therefore not submitted any follow-up motion or any specific statement. However, we want to once again emphasize the importance of safeguarding the value-added tax as an effective source of revenue for the financing of our common welfare. To make the system transparent, effective, and non-distorting, the value-added tax should primarily be uniform.
The value-added tax is a tax area that today has several exceptions from the general principle. The Government should therefore work to review the exceptions that exist today. The goods and services that have either of the two reduced VAT rates should be promoted in other ways, primarily through the budget side of the state budget.
The major tax reform of 1990/91 was based on a number of distributionally sound and economically rational principles to design a tax system that was both socio-economically and distributionally efficient. One of the core principles was a more neutral and uniform taxation of different parts of private consumption.
Since the reform was introduced in the early 1990s, a large number of deviations have been made from these principles, with several exceptions such as large tax cuts on income and wealth. The large tax cuts for those who earn the most, which SD and the government now propose in their budget, are neither distributionally sound nor economically rational. They are solely about more money for those who already have a lot and less or nothing at all for those who have little. It is old classic right-wing politics for increased gaps and greater inequality that is put forward by SD and the government.
All these deviations, in combination with other changes in tax policy after the reform's implementation, have led to the fact that today's tax system is characterized by large and serious problems. This also applies to the value-added tax.
The need for a new, comprehensive review of the tax system is great. The fundamental pillars for the review shall be that the tax system shall generate stable tax revenues for the financing of our common commitments, be simple for individuals, and be based on the principle that tax shall be paid according to ability to pay.
Fredrik Ahlstedt (M)
Mr. Speaker! I became a bit curious when this matter of a uniform value-added tax came up. I would very much like Member Olsson to elaborate a bit on what she means. Is it the Member's intention that we should raise the VAT on food? Should we raise the VAT for those who conduct business within tourism? Or does the Member mean that we should lower the rest of the VAT?
I think it would be interesting and clarifying to find out if the Social Democrats mean that we should raise the VAT on food.
Marie Olsson (S)
Mr. Speaker! What we mean is that we need to review the value-added tax system that we have today. We do not mean that we should raise the VAT on food or lower the VAT on this or that. A review of the system needs to be made so that it becomes more uniform, which it is not today when a lot of exemptions are made all the time.
Fredrik Ahlstedt (M)
Mr. Speaker! Admittedly, there are a number of exceptions when it comes to VAT. But the two main parts still concern the VAT rate on food that we buy in the store, which is a very large expense item for many families with children, the elderly, and single-person households.
We also have the so-called tourist VAT, which is a very important subsidy for that type of business. Furthermore, the same differences regarding VAT rates exist in large parts of Europe.
I still think the member needs to explain if it is the case that the Social Democrats mean that we should raise the food VAT. Or do you mean that we should lower the other VAT? This is what it is about anyway. Are we to lower the other VAT, or are we to raise the food VAT?
It would be very good for the audience and TV viewers to find out if the Social Democrats really want to raise the food VAT.
Marie Olsson (S)
Mr. Speaker! It would be desirable if representatives for the government parties had as much concern for families with children and single parents when presenting budget proposals as they do when participating in this debate. The proposals for tax cuts do not directly benefit families with children and single parents. I wish for that concern in more areas.
We Social Democrats have no intention of raising the food VAT. That is a direct answer. But we want a more uniform VAT rate.
Fredrik Ahlstedt (M)
Mr. Speaker! The report deals with a proposition where there are proposals for changes in the value-added tax. These are proposals that primarily affect small companies and sole proprietorships as well as hobby activities.
The government wants to improve and simplify for small businesses in Sweden. Small businesses are very important for growth and employment in Sweden. According to several of the industry's experts, seven out of ten new jobs are created in small businesses in Sweden.
Even the smallest companies and sole proprietorships are of great importance for growth in Sweden. There are approximately 900,000 sole proprietorships in Sweden. Even within the EU, a large proportion of jobs are in small companies, which makes this a priority issue.
The European Commission came forward about a year ago with a proposal for a new directive for small and medium-sized enterprises, the so-called SME directive. It aimed to strengthen small and medium-sized enterprises and attempt to simplify and improve rules and laws.
Among the proposals that stand out and are more concrete are simplified tax returns and shorter payment terms. The EU Commission has worked on following up on the issue of shorter payment terms, and this has led to a debate even in Sweden. The debate in Sweden concerns the fact that the large companies are trying to strengthen their liquidity by extending payment terms towards their suppliers. This naturally puts great pressure on many small and medium-sized enterprises.
Mr. Speaker! It is in light of this that we shall see the bill and the report. The Government proposes that the turnover limit shall be raised from 80,000 to 120,000 kronor for exemptions from the value-added tax obligation. This also entails that persons covered by the exemption from tax liability shall be issued a simplified invoice. This shall occur as part of a further simplification and improvement for the small companies.
The Government further proposes a number of additional changes to the Value Added Tax Act that shall facilitate for companies established in Sweden but with limited activities within the European Union through exemptions from tax liability. The Government also proposes that the reverse procedure shall apply, that is, that even a taxable person or a company in another EU country shall be able to apply the exemption from tax liability in Sweden.
The Government proposes further other changes with reference to the small business directive in order to simplify for small companies.
These changes may partly seem small and occur in the margins, but they are of great importance for the small companies in Sweden. The small companies must be strengthened in order to further increase growth in that part of the economy. Through this proposal, we will get a good way of the way.
Mr. Speaker! I vote in favor of the committee's proposal in report SkU3.
The deliberation was hereby concluded.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.