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HOSPITAL

Hospital in ‘fairyland’ tax haven claims

An estimated 1.3 billion kronor of taxpayers money set aside to build Sweden's most advanced hospital is alleged to have been channelled to a tax haven in Luxembourg by the companies behind the project.

Published: 26 November 2014 11:20 CET
Hospital in 'fairyland' tax haven claims
A model of the new Karolinska hospital being constructed in Stockholm. Photo: Bertil Enevåg Ericson/TT
The new flagship Karolinska hospital in Stockholm is aiming to become a world leader in medical training and provision, building on Sweden's reputation for scientific advancements and even hoping to develop future prize winners in Alfred Nobel's home country.
 
The project is expected to run into billions, with Swedish media reporting it could cost as much as 52 billion kronor. 
 
But reporters for Swedish television network SVT's Mission Investigation (Uppdrag granskning) programme have unearthed documents which they believe connects the companies behind it to a complicated tax structure in Luxembourg.
 
In the programme, due to be broadcast on Wednesday evening, they suggest that that large amounts of money were transferred to Luxembourg using complex financial structures in order to avoid tax in Sweden. 
 
The development is run by the SHP (Swedish Hospital Partners) organization, comprising of Swedish building giant Skanska and British investment firm Innisfree. SHP secured the contract when it was put out to tender after putting forward the only bid to build, finance and operate the building until 2040. 
 
It has been alleged that as much as 1.3 billion of public money meant for the project has been channelled to Luxembourg. SVT reporters examined leaked papers by auditing firm PricewaterhouseCoopers as part of their research. 
 
The financial commissioner for the Stockholm County Council said he was "disappointed" with the accusations in the programme.
 
"I think it's sad to hear that they have such aggressive tax planning. Here we will build Sweden's most modern hospital and provide care to the most ill in Stockholm with the best treatment. I think it's unethical not to pay taxes in the country where they operate in," Torbjörn Rosdahl told the SVT programme. 
 
Earlier this month The Local reported that several major Swedish companies including Ikea, Tele2 and SEB have also secured secret tax deals in Luxembourg. 
 
The Swedish firms were among 340 international companies looked at by the International Consortium of Investigative Journalists (ICIJ).
 
ICIJ said that Luxembourg was still a “magical fairyland” for corporations seeking to "drastically reduce tax bills".
 
SHP has stated in the past that its tax arrangements comply with Swedish law.
 
The Local/pr

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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?

Published: 30 October 2023 15:21 CET
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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