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TAX HAVEN

Tax agency in 2 billion kronor tax haven haul

Swedish tax authorities have managed to recoup more than 2 billion kronor ($258 million) from foreign tax havens in the last five years.

Published: 12 June 2009 14:51 CEST

In most cases, small business owners, directors, and high-level executives are the ones trying to hide their money from the Swedish Tax Agency (Skatteverket), reports the LO-Tidningen newspaper.

The agency estimates that Swedes have managed to shelter 400 billion kronor in foreign accounts, but international cooperation has improved in recent years making it easier to trace tax-dodgers and collect on back taxes.

“It’s become much easier to work with other countries,” Skatteverket project manager Katrina Björk told LO-Tidningen.

“We learn a lot from one another and help each other more than before. When one country succeeds using a certain method, it shares its knowledge with others. And we get tips about Swedish companies’ activities in other countries.”

A special group at the agency dedicated to collecting tax arrears from individuals and small and medium-sized companies has so far brought home around 2 billion kronor from 780 individuals and 173 companies.

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Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance?

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes.

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner.

How did the government agree to change the employment allowance in its coalition deal?

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment allowance to 12.75 percent up to a maximum rebate of 53,600 kroner.

How might this be further increased, according to Børsen?

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance.

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement.

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.

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