Response to interpellation 2024/25:40 on RUT and ROT abroad
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
M considers that according to EU law it is not possible to limit the rut and rot deductions to services performed in Sweden 1 2. M argues that the deductions abroad constitute an extremely small part of the total deductions 1 and that it is not reasonable for the money to go abroad since the purpose is to create jobs in Sweden 2 3. M is open to discussing proposals from S on how the system can be improved 2 3. S considers it an injustice and immoral that tax money is used for renovations abroad 4. S argues that it should be possible to limit the deductions since other EU countries have done so 4 5 6. S considers that the money disappearing abroad is a lot and could strengthen the welfare 6.
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! Eva Lindh has asked me if I intend to work to limit the maintenance and renovation deductions to only apply to services performed in Sweden. As background to the question, it is stated that there are countries in the EU that have similar phenomena, but where the deduction has been limited to only apply to services performed in their own country.
Eva Lindh returns to the question of rut- and rotarbeten abroad. As I mentioned during our previous debate, it is not possible for EU law reasons to limit the provisions to only cover services performed in Sweden.
It can be added that the value of rut and rot work outside Sweden constitutes an extremely small part of the total rut and rot deductions.
Eva Lindh (S)
Madam Speaker! The RUT and ROT deductions were introduced with the intention that they should eliminate undeclared work, increase the number of services, and stimulate the market during a temporary slump. Now that the RUT and ROT deductions have not only remained in effect but have continued, the Swedish National Audit Office has shown that they have not achieved the intended effect. This, however, is not what I intend to debate today.
I want to debate the injustice in this. It is an immoral arrangement that means one can receive tax money in Sweden if one has a house in Spain and renovates it.
Even though our political opinions differ, we in Sweden have a high tax morale. People pay their taxes and expect that what is paid in taxes is managed and goes to the right things. Most people have no idea that this is happening, that is, that one can request to receive rot- or rut-deductions when one has a house outside Sweden's borders. Now knowledge about this is increasing, so every year more and more people make such deductions. This means that the cost, which was not so high a number of years ago, is becoming higher now. I do not think that it is reasonable.
In response to my interpellation, the Minister for Finance says, firstly, that it is not possible to make changes according to EU law, and secondly, that it is not about that much money. I want to argue against both of these answers.
Firstly, it should be possible according to EU law. At least, that is what I and my fantastic colleague Hanna Westerén have found out. Three countries in the EU have such a provision: France, Italy, and Belgium. They have similar services but have been able to limit them to only apply within the country's borders. It would be reasonable to make an attempt anyway, wouldn't it, Finance Minister? Since other countries have been able to do it, Sweden should also be able to fight for an amendment here so that it is not possible to use tax funds to renovate one's house in another country.
Secondly, the Minister for Finance says that this constitutes an extremely small part of the total rot and rut deductions. In a previous debate, the Minister for Finance also said that it was not about that much money. Therefore, I want to read out a line from a statement that I found during a quick Google search: a comprehensive investment of 69 to 100 million in the justice system over five years. So, it is spoken of as a comprehensive investment of 69 to 100 million. Suddenly, such a sum is very much. But when it comes to how much money disappears abroad on rut and rot, the Minister for Finance says it is not that much. The argumentation does not quite hold together.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I thank Eva Lindh for the interpellation. The question has been up for debate earlier, so I shall be relatively brief.
One can absolutely have different views on whether this is much or little. Half a percent of the total deduction was more of a factual piece of information. Whether to think it is much or little lies more in the eye of the beholder.
The main reason why the government is not proceeding with this is that, with the way our rut and rot deductions are designed, it is not possible to exclude those who live in other countries, according to the most competent tax department at the Ministry of Finance. It would otherwise be quite reasonable. I share the view and completely agree that we do want the jobs to be here.
Eva Lindh is welcome to get back to me and demonstrate in what way this is done in other countries. I know that Finland tried but had to back down. Something is probably that which distinguishes the Swedish system for rot and rut from other countries.
As far as I know, the Social Democrats have nothing in their budget motion regarding a new proposal that would work better, but I am absolutely open to discussing this. My position is the same as Eva Lindh's: This is not reasonable. That is not why we have rut- and rot-deductions in Sweden. We have them to create jobs and get more white-collar jobs in the sector.
Eva Lindh (S)
Madam Speaker! This is, as has been said, completely unreasonable. In Sweden, the rotavdrag was introduced for the purpose of increasing the labor supply and reducing undeclared work by increasing the incentives for using registered companies. So it has been written. Rut and rot were intended to be for Sweden.
I do not intend to enter into any discussion regarding what the Swedish National Audit Office has pointed out in terms of execution. But I want to make a side note about something that makes the whole thing even worse. They have raised the ceilings and separated them. Now, it is not just that more people know about this, but now it is also possible to replace marble slabs in the kitchen even in one's house outside Sweden. I think these are completely unreasonable priorities.
We have been into how one prioritizes. That is how it is with politics: It is not just about wanting, but it is also about prioritizing. The SD-led government prioritizes tax cuts specifically targeted at those who have the most. One also directs special investments in rut and rot for those who have the most. An ordinary family cannot take out all that comes from raising the ceilings and separating them.
Giving more to those who already have is truly a special branch for the government. It upsets me. But it upsets me even more that if one has a home both in Sweden and abroad, one can make deductions for both.
Certainly, it has been discussed whether it is possible according to EU law to limit this, but facts now show that there are three countries in the EU that have received or taken the opportunity to do so. They have in any case been able to limit their corresponding deductions to only apply in their own country. Is it then not worth fighting to remove rut and rot abroad? I think so.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I want to briefly mention a fact that might be good to keep in mind. This year we have separated rot and rut, and the ceilings are higher than they have been previously. This is temporary for this year and will not apply next year.
Furthermore, I am absolutely open to seeing what other countries have done. The Social Democrats are welcome to submit a proposal. If it truly is a similar root and rut system in the three countries that Eva Lindh mentions and they can do it in that way, then of course we should also be able to do it. But they could also be designed generally in a different way. Let us return to this!
Whether it is much or little can be discussed. My main reason for not making any change is that we have tried but have not succeeded. However, I am not closing the door. I think, on the contrary, that it would be wise if the money stayed here. The whole purpose of the proposal is, after all, that it should provide jobs in Sweden.
I have nothing more to add to the debate but I am happy to listen.
Eva Lindh (S)
Madam Speaker! I had a meeting last night about a completely different subject, but I mentioned that today I would have a debate about rut and rot abroad. I am not the only one who reacts by thinking that this is completely crazy. It is simply not reasonable that it works in this way. That is also why I have raised this issue for several years. Neither did we do anything, but now we want to do something. We see that it might be possible to make a change. There are several countries that have restrictions, and we think it is completely reasonable to do so. I am upset, firstly, because tax money goes to people who already have, and secondly, because of the unreasonableness that it occurs when it is a question of housing abroad.
I still want to dwell on this point that it is not a question of that much money. One cannot rightly call investments "extensive" when it goes from 69 million to 100 million in a budget if one considers that the word "extensive" cannot be used for the root and rut money that goes out to households beyond Sweden's borders. We must be careful with every krona. This is a lot of money that could significantly strengthen the welfare - for example, by having a part of the housing supplement that the government chooses to remove during the next year remain. It is about doing the right things with the money we have in the state budget, and this is a gross injustice.
ANDRE VICE TALMANNEN
The Minister for Finance has announced that she abstains from making her closing remarks in this interpellation debate.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.