people and restaurants trying to do a good thing pic: New York Times
Sometimes it’s difficult to do the right thing. Members of parliament, namely the Moderates, Christian Democrats and Sweden Democrats are pushing for extending tax-free benefits to include parking spaces near hospitals and the lunches that ordinary people and local restaurants are donating to hospital personnel. The Social Democrats are saying that’s harder to do than it looks.
Benefit tax, förmånsbeskattning, is a system in which a tax must be paid for any work benefits given to an employee. For example, perks might be having a car for work, or a parking place, or lunches when at work. Almost any compensation for doing work, in the form of money or anything else, is taxed: When it comes to work perks, the employee must pay income tax on whatever perk they get, and the employer pays the social fees on it. (Yes, there are official flat rate social security contributions for each perk – a lunch that is included in a work day has a flat rate tax of about 98 SEK.) Perks turn out to be not so perky.
Back to lunches. The parties above are arguing that hospital employees in these Covid times should be exempt from these taxes, times being what they are. But the government is putting the brakes on. It is apparently hard to give one small group an exemption from the rule. SvD writes that the government is going to lighten up on the benefit tax for parking, but that it is doing it for all occupations, not just hospital workers, because of this difficulty. For the moment, it is suggesting a 1000 SEK rebate on the lunch benefit tax, but the opposition parties think the government should go further.
The Committee on Finance will be meeting on Tuesday to hash it out.
Privacy laws between Tax Agency departments to be loosened pic: Christine Olsson/TT, Ali Lorstani/TT
One of the problems that Sweden has had regarding fighting fraud and other crime has been that the Swedish Tax Agency’s department of tax reporting (beskattningsverksamheten) was sealed from its other departments, such as the department for civil registry (folkbokföringsverksamheten). The one department wasn’t allowed to run a check with the other department that the information they had was accurate. For example, someone in charge of doling out housing benefits (bostadsbidrag) couldn’t check to see if the person seeking the subsidy was actually registered as living at the address they gave on the form, and if they had a right to the assistance.
The new rule also allows checking to see if the employment contract someone uses as a reason for being granted residency is actually backed by a legitimate company that employees people and pays taxes.
The separation between the departments were set up for reasons of personal integrity, but now “Things that weren’t possible eight years ago are possible today” said Minister of Finance Magdalena Andersson. ”This is particularly important in these Corona times,” said Andersson, ” because we’re using large amounts of tax payer’s money.”
Sweden’s Radio (SR.se) reports that the regulatory changes will take effect on June 1st.
coordination number application to be stricter pic: kywnewsradio.radio.com
The government proposed today that the rules for granting “coordination numbers” (samordningsnummer) are going to be tightened. Coordination numbers are identification numbers used for bureaucratic purposes and are connected to one person. They began to be given out in 2000 for people who were connected to Sweden, but who were not registered in Sweden – were not folkbokförd.
A person can not request a coordination number for themselves. However, any state authority from, such as, the Swedish Radiation Safety Authority to the Swedish International Development Cooperation Agency, can request a coordination number on behalf of someone. Even an institute of higher education, like Hermod’s or any other adult education (Komvux) institution can request a number on behalf of a person. All that has to be done is affirm that they have checked out that the person is who they say they are. The document that is provided to confirm identity must not be, according to Skatteverket, of “too simple a nature, or easy to fake”. (See the Skatteverket document here.)
Even people who can not formally document their identity can get a coordination number if they need to be registered with, for example, the police, the Swedish Migration Agency or with Skatteverket. In these cases, Skatteverket writes, these agencies should try “as much as possible” to confirm the person’s identity.
There have been a lot of coordination numbers handed out since the system began – nearly 870,000 numbers, according to SVT. And even though a coordination number is not necessarily a work permit or a residence permit, and does not grant the holder the same social service benefits as a person number, it is easy to mistake the two. The person number is used for everything in Sweden, and a person number and a coordination number appear exactly the same – a 6 or 8 number birthdate and four additional numbers. A misspelled name in one instance can result in two coordination numbers. Not even an address has been required. Now, however, a couple changes are on the way.
At a press conference today, SvD reported, Minister for Finance Magdalena Andersson said that coordination numbers that have not been used for five years would be unregistered, and, if a mistake is discovered in the application’s information, the number can be revoked. In addition, an address will be necessary for the paperwork to be completed – although that requirement can be waived if the person in question cannot confirm their identity.
An address isn’t so hard to get, though: They’re available for a few hundred kronor to the right person. “We see clusters of fraudulent activities and crimes associated with certain persons and certain addresses” commented Tobias Wijk at Skatteverket. In one case, over a hundred foreign citizens with coordination numbers were registered as living at one address, SvD reported, and there were more addresses like that around. In one case, Skatteverket found 80 convicted criminals giving the same address as their contact for state agencies.
It isn’t actually illegal at all to offer this “mail service.” The problem, says Wijk, is if the person being paid for this service is not paying tax on the income they receive, or if the address is being used in some criminal way. SVT‘s investigation in last December found that the price for a month’s use of an address was up to 500 kronor.
In a 2017 investigation, SvT reported, Skatteverket found that in a sample of 4000 coordination numbers, 45% of the holders were not able to confirm their identity and 75% of them were not legally allowed to work in Sweden. Aftonbladet reports that the Moderate party has called for the recall of all coordination numbers, due to their fraudulent use.
The coordination number is a necessary identification measure for people who do not have a person number but who have ongoing contact with Swedish authorities. The government is now acknowledging that there are too many ways in which the system can be subverted, or, as Andersson put it, “there are shortcomings in the system as it is today.” The changes that were announced are a “quick track” to more thorough changes to the system that are still under consideration.
Sweden got a thumbs down from the European Securities and Markets Authority (ESMA) regarding its measures to counter tax evasion, SvD reports today (). Sweden has done nothing, they say, (zip zero nada) to make illegal the kind of money-moving that resulted in the “cum-ex files” international financial scandal last year.
Basically, the scheme involved asking tax authorities for tax refunds on taxes that were actually never paid. In Sweden, (and this is grossly simplifying), it mostly involved what was called a cum-cum deal (pronounced kume, presumably) in which investors “loaned out” their holdings to a frontman to avoid paying withholding tax.
It’s complicated. Plus, and this is obviously embarassing for Skatteverket and its fans, it wasn’t actually illegal in most cases – it was just sort of morally corrupt.
ESMA is urging Sweden to get a move on fixing this issue. Germany’s already done their part.
