taxes Archives • SwedeInternational

Tough times for work perks

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.

Sun. 18/8 – money in, more money out

Summer is over. It’s not over because a certain amount of days in a row have a certain temperature, like when you hear that winter has started (no, not yet), and it’s not that you’ve stopped reaching for your flip-flops on your way out the door. No, summer is over because the Prime Minister has held “the summer speech” (sommartalet).

Why this particular speech is called the summer speech, when it actually signals the end of summer, is a mystery. But it’s been held. And the news is a new, big injection of funds to all the poor municipalities out in the country, courtesy of richer municipalities (kommuner) .

This has always been the case – richer municipalities contribute to the life support of poorer ones that, due to whatever reasons, can’t cover their expenses. In Swedish it’s called kostnadsutjämningssystemet or, cost equalisation system, and the main idea is that municipalities and regions throughout Sweden should have, and shall have, the same economic resources with which to manage their responsibilities.

However, the movement of people and services from poorer municipalities and regions to richer municipalities and regions has only continued: The tax income from younger people still living and working in the smaller municipalities simply does not cover the expenses that the these entities must cover, like taking care of their elderly. Municipalities that have not been able to cover their expenses get financial injections every year, but Löfven went out today to say the injections will be increased. Aftonbladet reports that with these changes, Stockholm will pay 1.6 billion kronor more than it has before. Richer municipalities that will now be paying more to keep poorer ones functioning, however, will be compensated by a special “introduction support” (införandebidrag) ().

Obviously, the details are fuzzy. This is, after all, a summer speech, and those who are still on vacation can go back to sipping umbrella drinks. But another group that might want a stiff drink right now are the municipality governments who will be forking over a bigger sum than they perhaps counted on.

Wed. 31/7 – Spotify’s report card

Is Spotify Swedish? I don’t know. Swedes started it, certainly. But then the owners went and listed it on the New York and not the Stockholm Stock Exchange. They have a thousand or so employees here, but they have more in the US. The employees here pay taxes here of course, but Spotify is registered in Luxembourg so there go any tax wins for the state – plus founder and largest owner Daniel Ek manages his taxes through a bunch of companies in countries that have lots of palm trees, fancy accountants and empty offices ().

But OK, it’s pretty Swedish anyway, sort of, and we can point to our high innovation index ranking (2nd in the world – see earlier post) for a way of getting some Spotify cred. Yay Swedish teachers!

So here’s the Spotify news: It’s still not not that profitable. 13 years now, and really barely a cent in the plus column (). The report released today shows it’s still growing faster than your teenage nephew (who’s probably a paying Spotify member come to think of it), but there’s more competition than ever. (In the US, Apple Music has more subscribers than Spotify, even if Spotify has more overall users – .) The number of paying Spotify members increased by 31%, which, frankly, seems darn good – but, alas, the market expected a few more. When that didn’t materialize, Spotify stock took a hit ().

Spotify and its backers are hoping that its foray into podcasting will take off, and that Spotify will be the giant everyone thinks it is. Too bad that that won’t help Sweden that much.

Tues. 23/7 – do your tax evasion here

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.