Response to interpellation 2022/23:228 on the termination of the exit tax investigation
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns the government's decision to scrap the investigation into exit tax. M argues that the government is prioritizing other investigations to combat crime and improve conditions for entrepreneurship 1. M emphasizes that they are actively working against tax evasion through EU cooperation and updated tax treaties 1, guarding the tax system 2 and countering exclusion to reduce inequalities 3. S considers that the government scrapped the investigation secretly 4 5 and gives the green light for tax evasion 6. S argues that tax evasion must be fought as hard as benefit fraud 4 5 and that the costs for the investigation are negligible 5 7.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! [The member] has asked me why I and the government laid down the exit tax investigation and what measures I am considering to rectify the problems that exist with the ten-year rule and its application.
The resources for government inquiries are limited, and priorities must always be made. The Government has an offensive reform agenda to, among other things, combat serious crime, improve the conditions for entrepreneurship and make it more profitable to work. This requires inquiry resources. The Government therefore chose, in a prioritization of these resources, not to proceed with the Inquiry on the taxation of individuals moving abroad.
Sweden is a small open economy that builds its prosperity on trade and export. A reform of the ten-year rule therefore presupposes that the conditions for entrepreneurship and for the recruitment of qualified personnel to Sweden are not worsened in a way that is not justified. When companies expand abroad, it is also important not to make it difficult for personnel to accompany them during periods. Furthermore, it is important with clear and distinct rules that do not create unnecessary complications for ordinary people and ordinary companies.
Tax planning and tax evasion are, in the long run, a threat to the legitimacy of the Swedish tax system. The Government will continue to work actively in, for example, the OECD and the EU on these issues. Two issues that are relevant during the Swedish presidency are an update of the EU's list of non-cooperative jurisdictions and a proposal for a directive with rules to prevent legal entities lacking substance from being abused for tax purposes.
Mathias Tegnér (S)
Madam Speaker! Thank you, Minister Svantesson, for the answer! The background to this interpellation is that the government chose to scrap the so-called exit tax investigation in January this year.
The person who opened Dagens industri on January 31 could read the following headline: "Government scraps investigation on criticized tax - in silence." The article continues: "In all silence, the government has scrapped the investigation into the much-criticized so-called exit tax, which aimed to arrange an effective capital taxation of persons moving from Sweden."
The purpose of the investigation was therefore to examine the possibility of closing a loophole in our tax rules concerning persons who move from Sweden with unrealized capital assets. The background to the investigation is actually that both the National Audit Office and the Swedish Tax Agency have stated that today's rules do not work – that there are loopholes in Sweden's tax rules and that the so-called ten-year rule does not work. I want to remind the Chamber and any observers that it was in total agreement that the Swedish Parliament decided on the ten-year rule in 1983.
This loophole caused the Swedish Tax Agency to produce a proposal for new tax rules that would address the problems with today's tax rules. The Swedish Tax Agency's proposal was then referred and received criticism for its design. What the old government did, in all its wisdom, was to shelve the proposal and appoint an inquiry, because the problem still remains even if the Swedish Tax Agency's proposal had challenges and problems. This was, as said, a particularly wise decision by the old government, precisely because the proposed rules could have had negative consequences for our economy and growth, but also, as I said, because the problem with the tax loophole regarding unrealized capital gains when natural persons move from the country remains.
In many of our neighboring countries, Madam Speaker, special tax rules apply when natural persons with unrealized capital gains move from the country. Denmark, Norway, Germany, the Netherlands, France, Spain and Canada have special tax rules in these situations.
Therefore, my question to the Minister for Finance remains. Now that you have laid down the exit tax investigation, what do you intend to do to close this loophole in today's regulatory framework? Or do you not think that everyone needs to pay tax? Most successful Swedish companies do, in fact, proudly pay tax in Sweden. Why should that not apply to everyone?
Those who have followed the debate, for example in Dagens industri, have been able to read that these arrangements can be purchased from banks in Sweden for 300,000 kronor. I want to point out the obvious fact that it is hardly ordinary workers or, for that matter, ordinary small business owners who purchase tax consultancy for 300,000 kronor.
So the question remains, Madam Speaker. What does the government intend to do? How is this tax loophole to be closed? Or is this not a problem for Sweden's right-conservative government?
Niklas Karlsson (S)
Madam Speaker! Today's debate on the inquiry into exit taxes concerns a fundamentally very pressing issue for the Swedish Riksdag and also sheds light on which interests we as politicians represent. When I, as a Social Democrat, think my political thoughts and formulate my political proposals, I follow the principle that we shall all contribute according to our ability and that we have common concerns and benefits that we shall also contribute to together, every single one of us. The easier it is for me to contribute, the more I shall contribute.
For me, the tax system is about legal certainty and justice. It must be legitimate, and we must all contribute. Therefore, all forms of cheating must be curbed and tax evasion must be combated. It is fundamentally about the credibility and legitimacy of the entire welfare society and the tax system. The exit tax investigation, which this interpellation debate is about, was an investigation commissioned to address just such problems and uphold the principle of credibility and legitimacy in the tax system and the principle that everyone should contribute according to their ability.
The government chose a few months ago, during the holidays, to secretly shut down this investigation. The reason for this can, of course, be pondered. But it is clear that what is dimly intended is dimly stated. The Finance Minister and the government probably do not want this debate at all.
But the question naturally remains for those of us who are concerned with upholding these principles: Why was this investigation scrapped? The reasons the Finance Minister gives in his interpellation response are fundamentally false. When the government says in its response that tax planning and tax evasion in the long run are a threat to the legitimacy of the Swedish tax system, I find it difficult to see how one draws the conclusion that the exit tax investigation is no longer needed if one wants to maintain credibility and legitimacy.
Madam Speaker! For me, it is very simple. Fraud is fraud, and it must be combated. All forms of tax fraud shall be combated just as harshly, just as consistently, and with just as high intensity as subsidy fraud. But that is obviously not the case in the government's world. Other priorities are made and the gaze is obviously turned away.
Madam Speaker! The questions that the interpellator Mathias Tegnér has asked in the debate deserve to be answered; it has not happened so far. What does the government intend to do now, if one thinks that tax planning and tax evasion is a concern and that tax evasion is as serious as benefit fraud? Or is it simply that other interests are being prioritized and that not everyone is to contribute according to their ability or pay tax?
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Thank you, the interpellor, for the questions! There were two questions asked. One was why we laid down the exit tax investigation and the other was what other measures I intend to take to address these problems. I answered both in my interpellation response, but I will take them up again.
The first question has a simple answer: We are prioritizing other investigations. I will tell you why. After eight years of a Social Democratic government, there is little to tackle, so to speak. We have, together with the Tidö parties, a clear will and direction to tackle many of the major problems that Sweden has. It is about people who have ended up in exclusion and cannot support themselves. It is about eight years of a criminal development that truly requires a change. The list could be long. And for this, many investigations are required. That is also what we are prioritizing – we are prioritizing other investigations than just this one. Why then, one might wonder. It is actually quite simple: We are working on this issue in other ways.
I share both members' description of the need to really ensure that everyone, both companies and individuals, pay the tax they are supposed to pay, that they do not cheat and that they do not have aggressive tax planning. All of this is issues that this government is working on with full force.
Just this investigation, which the interpellator brings up, arrived only a few months before the election and began work in August. The Social Democratic government appointed quite a few investigations at the end. We decided, as I started by saying, that we are currently prioritizing other investigations because change is needed in Sweden.
With that said, it is not that this government is not working on these issues. We are, of course, actively working against aggressive tax planning and tax evasion because everyone should contribute to the common good, and everyone should do so in a fair way.
We are working, for example, at the EU level. I am now chair of the EU's finance ministers council, which is called Ecofin, and there we discuss many and many issues concerning tax planning and tax evasion. The best way to counter this type of fraud is, naturally, to do it together with others.
The Ministry of Finance is also working continuously to expand and update the Swedish tax treaty network. It is about securing Swedish tax revenues and reducing the possibility of planning away tax. At the same time, we provide business owners and entrepreneurs operating internationally with improved predictability to avoid double taxation and thus improved competitive conditions. One example of this is the agreement with Germany. I can return to that a bit later.
It is not the case that this government is not working actively on the issue. We do so in many different ways, and we will continue to do so both here in Sweden and together with other EU countries because it, as the interpellator says, is incredibly important that we tackle aggressive tax planning and tax evasion.
Mathias Tegnér (S)
Madam Speaker! Thank you again for the answer, Minister for Finance!
Let us first zoom out for a second. Inequality in the world is increasing and has been doing so for decades. A busload of the world's richest people own as much as half of the earth's population.
In our own country, 5 people own more than 5 million Swedes. In Oxfam's index on how well countries are at combating inequality, Sweden has fallen from an honorable first place a couple of years ago to 20th place in 2022.
For me, it is obvious that Sweden needs an active policy to reduce the gaps in our country. Unfortunately, Sweden now has a government that seems to have an ambition to increase the gaps and increase the inequality in our country. Much suggests that it will worsen the problems we are struggling with today: low school results, high gang crime, and a divided labor market. But with surgical precision, the government has lowered the tax for the richest and scrapped investigations that could have made Sweden more just.
When the Minister of Finance refers to limited economic resources for investigations, I become truly concerned. I would, however, like to start by stating that I have high confidence in the Minister's rhetorical ability and professional competence. But a normal-sized investigation costs somewhere between 2 and 5 million kronor. A well-balanced exit tax could mean a revenue - which today is lost - of between 1 and 2 billion. We could, therefore, investigate this issue for hundreds of years, and it still would not equal the cost of one year's revenue from an exit tax.
I know that it actually looks like this, because I myself have had the opportunity to be a government investigator. It is, moreover, an investigation that the Minister for Finance should look at if she wants to improve things for small business owners, because it concerns precisely small business owners' security systems. But now I got off-topic.
Once again: a normal-sized investigation costs somewhere between 2 and 5 million, a well-balanced exit tax between 1 and 2 billion. We could, therefore, investigate the issue for hundreds of years, and yet the cost would not correspond to one year's revenue from a well-balanced exit tax. Therefore, I think, Madam Speaker, that justifying the shutdown of the exit tax investigation for cost reasons is completely baroque.
Then, of course, I want to give the Minister for Finance the right that the exit tax was criticized. But it was precisely for that reason that the government laid down Skatteverket's proposal and appointed a new investigation that would handle the problems that existed in the proposal that was on the table.
I think it is very important that the government continues to work on developing new tax treaties with countries all around the world. But as long as one cannot change all Swedish tax treaties and write tax treaties with countries that do not want to write tax treaties with us, this problem will persist.
It is excellent that work is being done to renegotiate and rewrite existing tax treaties and that work is being done to develop new tax treaties, but it will not solve the entire problem—unless you in the government intend to take Skatteverket's proposal out of the trash, but you are not going to do that. And if you shelve the exit tax investigation, which you have already done, then there is nothing left to do. Then the talk about taking tax evasion seriously will be just talk and empty words.
The tax evasion is ongoing right now, right now as we stand here and talk. I noted just a moment ago that they continue, these criticized seminars that explain how the tax schemes work. I will willingly admit that I am not an expert on what the tax schemes look like. But my question to the minister is this: What does the government intend to do that actually solves the problem in reality?
Niklas Karlsson (S)
Madam Speaker! I noted the Finance Minister's latest response. We didn't become much wiser from it, did we, or perhaps we did – the answer was simply that other investigations are being prioritized, and that is sufficient answer. Tax planning and tax evasion are not as pressing issues under a bourgeois government as they are under a Social Democratic government. Benefit fraud is apparently more serious than tax fraud.
What is it that the government is now giving the green light for? Well, it is that those who can move their millions out and plan them away to avoid paying tax in Sweden without any worries can continue to do so.
I want to emphasize that the concern that Member Tegnér and I are expressing here in the chamber of the Riksdag is not only ours. It exists in many other places - also at the government's own agency Skatteverket, where there is concern over what is now happening when we choose not to protect our tax base and have tax treaties that limit our ability to handle this issue and the whole.
That is exactly why such an investigation was needed. The Swedish Tax Agency conducted an investigation as recently as 2007, where it turned out that the exit tax that disappears amounted to approximately 3 billion in 2005 and 2006. And it has not decreased – we see sham relocations, and we see tax consultants who, without shame, openly market their services. Tegnér has previously reported what is stated in Dagens industri – that for 300,000, one can get help to plan away one's millions so that one avoids paying tax in Sweden.
No, it is no longer a question of what the government intends to do. We have had enough answers. The government does not intend to do anything. One has other focuses and other priorities, and there is obviously a difference between cheating and cheating.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! This investigation was not laid down in silence, and the work against tax evasion and aggressive tax planning will not take place in silence – on the contrary. It may be good for the members to know.
The government stands guard over the Swedish tax system in order to be able to improve welfare and secure the state's most fundamental tasks. That is why I said earlier that it is so important to work to reduce aggressive tax planning and tax evasion. That is why we support and actively work with the measures being taken within both the OECD and the EU.
As I also mentioned in previous posts, this is prioritized during Sweden's presidency within the EU. I know that the members do not really want to hear this, but sometimes one perhaps hears what one wants. But we are therefore prioritizing work and proposals aimed at preventing tax evasion, tax avoidance, and aggressive tax planning. Now I have said it twice. I do not know if the members choose to believe me, but that is actually the case.
Furthermore, I can please the two Social Democratic members of Parliament by stating that there are a number of investigations in the area that the previous government appointed which are actually continuing their work. These concern, among other things, measures to prevent VAT fraud and a review of certain tax procedure rules to counter fraud and crime in the working life. It is very important.
Tax evasion, therefore, this government will work against to the highest degree, as well as all other types of fraud within that which is our common.
Finally in this contribution, Madam Speaker, I just want to say something about what was insinuated a little bit in the text that the member wrote. It was roughly that bourgeois governments or right-wing governments always cut back on the work against fraud. I want to remind the member that in 2018, the Moderates' and Christian Democrats' budget passed in the Riksdag - SD supported it. At that time, we added 10 million permanently to the Swedish Tax Agency so that they would work specifically against tax fraud. I believe we expressed it like this: Reinforced work with countering tax evasion and tax avoidance. It came from the Committee on Taxation. Those were the funds we put into the budget. And in the regulatory letter in 2019, based on the budget that we submitted, a mandate was received that was linked to the increase in the appropriation. They were then to work against tax fraud.
The permanent commitment was withdrawn a year later in a budget that the Social Democrats placed on the floor of the Riksdag. I just want that to be said, because what is right must be right. And it is important that we all work against tax evasion and against aggressive tax planning.
Mathias Tegnér (S)
Madam Speaker! Thank you, Minister for Finance, for the answer! It is good that the government continues to work on the previous government's work within the framework of the OECD and the EU. It is good that the investigation into VAT fraud has not been discontinued, but the fact remains: The evasion of tax in this area continues.
I noted earlier today that they criticized the seminars on how this continues. I cannot remember the setup perfectly, but it is about transferring the Swedish company at an underpriced value to a shell company in Malta or Cyprus. These are, therefore, transactions within the framework of the EU, and this will not be solved by the work that the Finance Minister refers to because different countries have the possibility, after the transfer has occurred, to have different taxation on the dividend made from the shell company in Malta or Cyprus.
If the Minister for Finance is interested in the design, I can say that I noted that the criticized seminars continue at Stureplan. Already tomorrow, from 18-20, the next seminar will be held in Ålandsbanken's premises. Unfortunately, it is fully booked, but the next seminar will take place as early as April - if the Minister for Finance has the patience to wait.
We Social Democrats have stood up for creating jobs and growth through a policy that promotes trade and growth. Millions of Swedes go to work thanks to our export industry. For us, just as the Finance Minister refers to, it is extremely important that Sweden has good rules that lead to jobs and growth being created in our country. But it is not by making the poor poorer or by removing the pursuit of tax evasion that we create growth in Sweden.
I have written a book about this which I had intended to hand over to the Minister for Finance, but now I forgot it in the bench. I promise that I will write another interpellation to the Minister for Finance, and then I will give a copy of the book to the Minister for Finance.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Many thanks, Mathias Tegnér, both for the upcoming book and for this debate! I share the member's view regarding all the people who set their alarm clock in the morning and go to work. They may have a low salary. They may have a high salary. Regardless of what salary they have, they struggle every day. They should know that the tax money they pay in is used in the right way. They should know that the government and authorities are working in every way to ensure that there is legitimacy in the tax system and that people do the right thing. That is what the vast majority of wage earners do, and that is what the vast majority of entrepreneurs do. We shall work in every way we can to ensure that money is used in the right way and is not cheated away, not defrauded away, and not fiddled away out in the world. It is incredibly important.
I want to conclude with what the member was touching upon in his previous contribution regarding the gaps. We have the Minister for Employment here in the chamber, and if there is one thing this government has decided on, it is to combat exclusion. It is about working so that more people have their own livelihood and ensuring that the gaps decrease and that all those who today do not have a job to go to – those who have been hidden and forgotten in the statistics for many years and who have not received any activity – also shall come into work and be included. They shall receive their own salary and participate in paying tax. This I can promise the member. It will also increase tax revenues, together with the work that we in this government do against tax fraud and tax evasion.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.