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Tax changes could cut costs for Swedish firms

UPDATED: Swedish Enterprise and Innovation Minister Mikael Damberg has told The Local about his action plan to turn Stockholm into the top startup city in the world. But critics of his proposals say they are too vague.

Tax changes could cut costs for Swedish firms
Sweden is home to many of the world's successful startups, such as Spotify. Photo: Lars Pehrson/TT

Startups have long argued that they struggle to attract key workers because of Sweden's comparatively high taxes on employee stock options which are used to pay staff in early days when cash is tight.

“Small startups which take big risks, which could go bust within a couple of years, need to be able to recruit good people. If you want to recruit someone from Ericsson or somewhere who has a high salary and you’re asking them to take a big risk and a pay cut, they need to get something else. They need to be able to share in the success if it goes well,” Mathias Sundin, who represents the Liberal Party – one of the four centre-right parties that make up Sweden's opposition Alliance group – told The Local on Wednesday.

However, profits from the stock options are currently taxed highly in Sweden, at a rate of 68 percent. This puts the Nordic nation miles behind the Silicon Valley-style location that many want Stockholm want to be; the corresponding figure from the US start-up hub is 15 percent.

But on Wednesday, Enterprise and Innovation Minister Mikael Damberg of the ruling Social Democrat-Green coalition spoke at Stockholm Tech Fest 2015 on and announced a government inquiry to review Sweden's strategy – which could potentially see the fees cut after its findings are presented in March next year.

“This is one of the first questions that companies raise with me today, as they don't have enough money to pay very talented people the salaries they need,” Damberg told The Local just after his presentation.

”But it shouldn't open up for some sort of tax planning, where people don't pay tax. The start-up scene has to pay its share of tax,” he added.


Enterprise and Innovation Minister Mikael Damberg. Photo: Marcus Ericsson/TT

Mathias Sundin, who sparked global headlines when he ran for parliament in September using only Bitcoin to fund his campaign, said welcomed Damberg's plans but added that they were too vague. He advocates taxing options schemes as capital gains at 25 percent and told The Local he would have liked to see concrete proposals to that effect.

”It would have been very much better if he had [said] 'we're going to do something about this. We'll sort this.' [Damberg's statement] is a good signal, but not more than that,” he said.

Damberg's comments come on the final day of Stockholm Tech Fest 2015 where hundreds of startups have gathered to discuss investment strategies and technology over the course of two days.

Stockholm is home to seven of the world's 78 start-up firms valued at more than one billion dollars. But a severe housing shortage in the capital is making it increasingly difficult for many companies to recruit international talent – simply because they have nowhere to live.

GUIDE: How to navigate Sweden's crazy rental market

“It's a really difficult situation, as we have a housing crisis in Sweden and have had for several years, as not enough has been built in Stockholm. My long-term answer is that we need to get house-building to increase. There's no other easy answer,” said Damberg.

”But in the short term people just wing it. You try to find friends and live together or you work with your company to find some kind of arrangement where you buy an apartment together. But it's very complicated.”

BUSINESS

France’s EDF hails €10billion profit, despite huge UK nuclear charge

French energy giant EDF has unveiled net profit of €10billion and cut its massive debt by increasing nuclear production after problems forced some plants offline.

France's EDF hails €10billion profit, despite huge UK nuclear charge

EDF hailed an “exceptional” year after its loss of €17.9billion in 2022.

Sales slipped 2.6 percent to €139.7billion , but the group managed to slice debt by €10billion euros to €54.4billion.

EDF said however that it had booked a €12.9 billion depreciation linked to difficulties at its Hinkley Point nuclear plant in Britain.

The charge includes €11.2 billion for Hinkley Point assets and €1.7billion at its British subsidiary, EDF Energy, the group explained.

EDF announced last month a fresh delay and additional costs for the giant project hit by repeated cost overruns.

“The year was marked by many events, in particular by the recovery of production and the company’s mobilisation around production recovery,” CEO Luc Remont told reporters.

EDF put its strong showing down to a strong operational performance, notably a significant increase in nuclear generation in France at a time of historically high prices.

That followed a drop in nuclear output in France in 2022. The group had to deal with stress corrosion problems at some reactors while also facing government orders to limit price rises.

The French reactors last year produced around 320.4 TWh, in the upper range of expectations.

Nuclear production had slid back in 2022 to 279 TWh, its lowest level in three decades, because of the corrosion problems and maintenance changes after
the Covid-19 pandemic.

Hinkley Point C is one of a small number of European Pressurised Reactors (EPRs) worldwide, an EDF-led design that has been plagued by cost overruns
running into billions of euros and years of construction delays.

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