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Tax cheats eligible for damages: Supreme Court

Serious tax evaders could be released from prison, see their convictions quashed and be eligible to receive damages from the state, according to a judgement by the Swedish Supreme Court on Tuesday.

Tax cheats eligible for damages: Supreme Court

The move follows an earlier Supreme Court decision in June, which ruled anyone who has already been issued a fine for tax evasion cannot then be prosecuted for the same offence.

In Sweden, fines and prosecution are tried by two separate procedures, a system that has been prohibited by both the European Convention and the EU Charter of Fundamental Rights since 2009.

Tuesday’s ruling added that the prohibition of this so-called dual punishment in Sweden would apply retroactively, as of February 2009.

Leif Gustafsson, a lawyer who has had several clients imprisoned for tax evasion offences, was pleased with the outcome.

“It was predicted and for a lawyer, it is satisfactory,” he told news agency TT.

Anne Ramberg, general secretary of The Swedish Bar Association (Advokatsamfundet) also welcomed the ruling.

“It is important that the Supreme Court has clarified this. This is another example where legislation should have been drafted in,” she said, adding that the government and parliament should have aligned Swedish law with the European Court back in 2009.

“If legislators are not doing their job then the Supreme Court must do it for them.”

However, the decision has been labelled a “spectacular scandal” for the government by Morgan Johansson, Social Democrat MP and spokesperson on justice and legal policy.

“This was the worst thing that could have happened. It means serious criminals, even those linked to organized crime, can have their convictions overturned and in the worse case can be both released from prison and receive damages.”

Since the initial June ruling, thirty people are reported to have appealed to have convictions quashed according to the Dagens Nyheter (DN) daily. A further 12 people have been released from jail until further notice.

The Local/cd

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TAXES

Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

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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