Sweden Consults On New Bank Tax
The Swedish Cabinet, on May 7, endorsed plans for a study to be undertaken on the Government’s proposal for a new tax on the financial sector.
Financial services, including banking, securities trading, and insurance services, are exempt from value-added tax (VAT). The Ministry of Finance said that this gives them an advantage over other economic sectors whose goods and services are taxed. The new tax would reduce that advantage and is intended to raise at least SEK4bn (USD486m) annually, it said.
The Ministry, which is appointing a commission to undertake an analysis of the levy’s impact, said the review would look at its impact on the provision and cost of banking and insurance services, on bank lending, and on competition between Swedish and foreign financial institutions.
It will also assess the tax’s compatibility with European Union (EU) state aid rules, and EU law in general, and revenue collections.
It is proposed that the tax would be levied on companies that provide financial services covered by the exemption from VAT, and its tax base would be the sum of a company’s wages and salaries and its profits. It was suggested that the payroll tax (lønsumsafgiften) imposed in Denmark on suppliers of VAT-exempt services could provide a basis for the levy.
The report on the new tax is to be completed by no later than November 1, 2016.
Source: lawtax – Sweden Consults On New Bank Tax
