Increased transparency for large corporations' tax payments
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
S welcomes the bill and the committee report because it increases insight and transparency regarding large companies' corporate income tax data 1. S argues that tax evasion is a gigantic problem that affects ordinary people and that it is a step in the right direction that multinational corporations with revenues over 8 billion kronor shall make reports public to Bolagsverket 1. MP considers that the bill is an improvement but is not comprehensive because it excludes most developing countries 2. MP also criticizes a loophole that allows companies to omit data about market positions that risk being harmed 2. MP wants the government to close this loophole 2.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Markus Kallifatides (S)
Mr. Speaker! The Social Democratic Minister for Social Affairs, Gustav Möller, is said to have said that every wasted tax crown is a theft from the people. I want to make an addition: Every evaded tax crown is also a theft from the people.
Tax evasion through advanced tax planning and direct tax fraud is a gigantic problem that affects ordinary people here in Sweden and all around our globe. Ongoing work within, among other places, the OECD to improve our systems for taxation, shut down tax havens and so on, and thereby protect the welfare state must be intensified.
Mr. Speaker! In a current report that my trade union organization Saco recently presented, it is reported that the OECD estimates that corporate tax planning causes a loss in tax revenue of between 1,000 and 2,400 billion kronor per year globally. This corresponds, in that case, to between 4 and 10 percent of global tax revenues. The International Monetary Fund, IMF, assesses on its part that global tax revenues would increase by approximately 6 percent without the large corporations' tax planning. For Sweden's part, just this form of tax evasion amounts to missing tax revenues on the order of 25 billion kronor every year.
Therefore, we Social Democrats welcome the bill that we are debating here today, and we stand behind the committee report.
In November 2021, the European Parliament and the Council adopted the amending directive regarding the publication of income tax data for certain companies and branches. The amendments aim to increase insight into companies as well as the transparency and public scrutiny of companies' income tax data. The implication of the directive is that multinational groups and companies operating within the European Economic Area, EEA, and which have annual revenues of more than 750 million euros or equivalent shall prepare a report on their income tax data and make it public.
The information in the report shall be reported for each country in the EEA in which the company pays tax. Information shall also be provided regarding activities in certain countries outside the EEA, specifically those jurisdictions – countries – that are included in the EU's list of non-cooperative jurisdictions in the tax area. The report shall be made public by a company within the group submitting it to a responsible registration authority in a country within the EEA.
Increased transparency for large companies' tax payments
What we have to debate today is the Swedish implementation of this amending directive. The Government proposes, among other things, a new law on the publication of certain large companies' income tax reports. According to the proposed new law, multinational groups and companies with annual revenues of more than 8 billion kronor shall prepare and publish a report with information on the income tax they pay in different countries. It shall be possible to temporarily omit certain pieces of information in the income tax report.
The report shall be made public by being submitted to Bolagsverket. The reporting company shall also keep the report available on its website. If the income tax report is not submitted on time, Bolagsverket may issue coercive fines against persons in the company's management. Bolagsverket shall also be able to impose the fine. Furthermore, it is proposed that the auditor in larger companies and in companies of public interest shall state in the audit report whether the company had an obligation to publish an income tax report according to the new law and whether the company has done so in that case.
It is a step in the right direction, Mr. Speaker.
I must take the opportunity to note that representatives from the Social Democrats and the Green Party are participating in this debate. I see no representative from the committee majority participating in this debate. I find that to be noteworthy, Mr. Speaker.
Katarina Luhr (MP)
Mr. Speaker! Today we are debating a new bill that aims to increase insight into companies and increase the transparency and public scrutiny of a company's corporate income tax data.
Through the law, requirements are introduced that large multinational corporations and companies with an annual revenue exceeding 8 billion kronor shall disclose information regarding the income tax they pay in different countries. The information shall be reported to Bolagsverket, and the report shall be kept available on the company's website. This we have just now heard described in detail by Markus Kallifatides.
This legislation represents an improvement over the previous legislation, as the lack of transparency makes it more difficult with accountability when it comes to, for example, tax evasion. However, the bill is not comprehensive. Reporting shall only occur from countries within the European Economic Area, EEA, and certain tax havens. Activities in most developing countries, where the problems with tax evasion can be large, are excluded. Developing countries lose large sums every year due to tax evasion.
It is also problematic that the government, in the legislation, chooses to settle for a minimum level, where one includes a loophole that gives companies the possibility to omit certain information in the income tax reporting if the disclosure of the information can seriously damage their market position. The possibility to omit information about tax payments risks making the reporting less effective in combating tax planning, and thereby tax evasion may be enabled. This is also something that has been criticized by several civil organizations.
Internationally, but also here in Sweden, we have in recent years experienced crises, such as a pandemic and a deteriorated security situation. Looking ahead, we see that we face great challenges when it comes to managing the climate crisis, strengthening our societies, and maintaining good healthcare, school, and welfare for all. A major challenge is to mobilize resources to be able to make all the investments that are required.
Increased transparency for large corporations' tax payments
Crises tend to affect those who are already vulnerable, living in poverty or marginalization. And with the need to manage the climate crisis and with the challenge of creating welfare for all, it is a major problem – yes, it is actually downright shameful – that thousands of billions are lost every year due to capital flight and various types of tax evasion. We all become losers when tax funds disappear due to tax fraud.
Preventing tax evasion in all its forms should therefore be prioritized in international cooperation, both to combat crime and to be able to manage all the challenges that we jointly need to solve through the financing of measures to strengthen our common society.
Since there are now loopholes in the current proposal, the law risks becoming less effective. I would therefore have preferred that the government had closed this loophole in its proposal. Otherwise, I wish for the government to return with a proposal where loopholes that risk tax evasion can be minimized through sharper legislation. Therefore, I wish to move for approval of the reservation from Miljöpartiet and Vänsterpartiet.
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.