Response to interpellation 2022/23:264 on the function of the ten-year rule
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 ten-year rule and the need to close loopholes in the tax rules to prevent tax evasion upon moving abroad with unrealized capital assets. M argues that the government is actively working against tax evasion through international cooperation in the EU and OECD as well as by prioritizing good tax administration 1 2. M emphasizes that the issue of a reform of the ten-year rule is being prepared within the Government Offices 1. S criticizes the government for having discontinued the exit tax investigation without presenting an alternative to stop aggressive tax planning 3 4. S argues that today's rules do not work and that a well-balanced exit tax would provide important state revenues 3 4. S believes that the government's current measures do not address the problem 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.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I have been asked whether the government will task the Swedish Tax Agency to return with proposals for regulatory changes to prevent tax evasion around the ten-year rule, or whether I and the government intend to prepare the issue in the relevant department to prevent this type of tax evasion.
Tax planning and tax evasion are, in the long run, a threat to the legitimacy of the Swedish tax system and must be combated with force. The Government therefore supports the measures that have previously been taken in this area and will continue to work actively in, for example, the OECD and the EU with these issues.
In the area of direct taxation, priorities during the Swedish presidency of the EU include, for example, work to promote good tax administration and proposals aimed at preventing tax evasion, tax avoidance, aggressive tax planning, and harmful tax competition. Two issues that are current are an update of the EU list of non-cooperative jurisdictions and a proposal for a directive with rules to prevent shell companies from being misused for tax purposes. In addition, priority is given to strengthening administrative cooperation in the tax area.
During 2018, the then government referred the Swedish Tax Agency's proposal on relocation taxation. The referral bodies submitted comments that pointed out real problems with the proposal's design.
There is currently no government mandate for the Swedish Tax Agency to submit a new proposal on regulatory changes to improve the function of the ten-year rule. The question of a reform of the ten-year rule is being prepared within the Government Offices.
Mathias Tegnér (S)
Madam Speaker! I would like to begin by thanking 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. Therefore, I have previously interpellated the Minister for Finance regarding what other measures the government intends to take.
The exit tax investigation was therefore, for those who are not aware, appointed to investigate the possibility of closing a loophole in our tax rules concerning persons who move from Sweden with unrealized capital assets. In practice, it concerns owners of successful companies valued at 10 million or more who want to sell the company and move – and preferably do so without paying tax on the capital gain.
Historically, there has been consensus that that type of transaction shall be taxed in Sweden. The Riksdag was in agreement in 1983, when the ten-year rule was introduced. The Finance Minister's moderate representative Anders Borg pushed through changes to the ten-year rule a decade ago, when it turned out that it did not work or had problems.
What I perceive as remarkable today is that the government, despite knowing that the ten-year rule has serious problems, chooses to do nothing about it.
Both the National Audit Office and the Swedish Tax Agency have stated that today's rules do not work, that there are holes in Sweden's tax rules, and that the so-called ten-year rule does not work.
In the previous interpellation debate, the Minister for Finance stated that the government takes the issue of tax evasion seriously and that they are, for example, working with what is called DAC, which is an administrative cooperation and exchange of information in the tax field driven by the EU. This is important and good. But one cannot handle the problems with the current ten-year rule by working with the DAC rules, and the Minister for Finance knows that.
Furthermore, the Minister for Finance explained that the government is working on updating tax treaties. That is also important and good.
But if the government does not succeed in updating all tax treaties with all countries, which is impossible, updates of tax treaties can also not stop this type of aggressive tax planning. The Minister for Finance knows that.
The only way to plug this hole is to investigate new tax rules. But the Finance Minister has chosen to stop this investigation - or as Dagens industri expressed it: scrap it in silence.
The type of rules that were investigated in the so-called exit tax investigation are not particularly strange. In many countries - Denmark, Norway, Germany, Holland, France, Spain and Canada - there are these types of special tax rules when natural persons with unrealized capital gains move out of the country.
Therefore, my question to the Minister for Finance remains. Now that you have concluded the investigation, what do you intend to do to close this gap in the regulatory framework?
Are the Finance Minister's assurances that the government is taking on the fight against tax evasion merely a lip service? You are not prepared to give the Swedish Tax Agency new directives, and you have shut down the investigation. What does the government want to do?
Or is aggressive tax planning no problem for Sweden's right-conservative government?
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I thank Mathias Tegnér for the interpellation.
Just as the interpellator said, it was not so long ago that we discussed this very issue in the chamber, so I will be quite brief.
I respect Mathias Tegnér and am impressed by his commitment to the ten-year rule. I can, however, think it is a bit strange that he did not succeed in convincing either Magdalena Andersson or Mikael Damberg during the time they were finance ministers to implement what Mathias Tegnér wants.
The government is truly taking the work against aggressive tax planning and tax evasion seriously. One can work in different ways, and in the previous interpellation debate on the subject, I mentioned some of what we do in both Sweden and the EU.
The previous government commissioned a number of good inquiries, and I look forward to reviewing them. 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. These are two examples of good inquiries.
A lot is happening here and now at the Ministry of Finance and the Swedish Tax Agency and, above all, at the EU level. In the previous debate on the subject, I said that this is an issue that Sweden prioritizes during the presidency and which I am pushing forward in Ecofin and will continue to push forward.
Why is this important? Well, because everyone must contribute to our common tasks in a fair way, and if some use creative arrangements, cheat or deceive to pay lower tax, others will have to pay higher tax. That is why we are very engaged in the issue at both the Swedish level and the EU level.
Mathias Tegnér (S)
Madam Speaker! I thank the Minister for Finance for the answer, even though I am a bit surprised when the Minister for Finance asks why I did not succeed in influencing Magdalena Andersson or Mikael Damberg. The truth is that both of these worked hard on the issue. First, directives were given to Skatteverket to come up with proposals in the area, and when it then turned out there were problems with that proposal, an investigation was commissioned. It was a wise action in order to specifically plug this hole.
What is difficult to understand is that the government is laying down this investigation without having an alternative.
One needs to put the question into perspective. We find ourselves in a world where inequality 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. We have an economy characterized by the winner takes it all. In such an economy, it becomes extra important to ensure that those who succeed well with entrepreneurship and choose to sell their company also pay tax on their capital gain.
Historically, we have been in agreement that this is how our system should function. Now it seems that the Finance Minister thinks this no longer applies, which is surprising.
As I said, I and the Social Democrats share the Finance Minister's opinion that there were problems with the Swedish Tax Agency's proposal from 2017. The proposal was referred and received criticism, which led the previous government, in all its wisdom, to abandon that proposal and appoint an inquiry.
But the shortcomings in Skatteverket's proposal are not a reason to scrap the so-called exit tax investigation. Again: Countries such as Denmark, Norway, Germany, Holland, France, Spain and Canada have this type of regulatory framework.
A well-balanced exit tax would mean a revenue to the state of 1-2 billion, which would be extremely important in the economic situation we find ourselves in.
The fact remains: This type of tax evasion is ongoing right now. I noted just before we entered here that they criticized seminars describing how these advanced and aggressive tax schemes work as still being held down at Stureplan. The seminar in March was full, and there are still seats left at the April seminar if anyone in the Finance Minister's vicinity is interested in knowing how this works.
The questions remain: Did you have no plan when you laid down the investigation? Or is this not a problem for the government? Every time the Finance Minister speaks about the measures the government is taking, there is no measure that addresses this problem.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I already said in my previous contribution that I will be brief because we debated this just a couple of weeks ago. I have answered the question in two rounds and have nothing more to say here and now. But I thank Mathias Tegnér for his commitment and questions and wish him a very pleasant weekend.
Mathias Tegnér (S)
Madam Speaker! I thank the Minister for Finance for the brief answer.
It pleases me that the Minister for Finance genuinely seems to want to combat tax evasion. But as I perceive it, nothing is being done in practice regarding this problem.
It is true that we have now had two interpellation debates on the subject, but I mean that it is reasonable to debate this. It appears that when the government commissioned the investigation on exit tax, it had other proposals to solve the problem. But the truth is that when the Finance Minister speaks about the measures the government is taking, they are measures that the previous government had already started and which do not address this problem.
As long as it is either not clear what the government intends to do to solve this problem or the government is clear and says that this is not a problem for the government, I will continue to ask the question to the Minister for Finance. Either it is not a problem that tax evasion is occurring down on Stureplan of unrealized capital assets when people move out of the country, or it is a problem. If it is a problem, the government must state what it intends to do to remedy this problem.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.