EU minimum corporate tax rules blocked by Swedish government

Swedish corporations have welcomed the move by its government to reject efforts by the French presidency to push through new EU rules setting a global minimum tax rate for European companies, ahead of a parallel effort led by the OECD. Swedish businesses, represented by the Confederation of Swedish Enterprise (Svenskt Näringsliv (SN)), last month strongly urged the Swedish government not to agree to the Directive until the OECD work on its GloBe Rules is completed and major trading partners are implementing the same agreed rules. If the EU were to proceed with its plans out of step with the OECD effort, European businesses would be seriously disadvantaged on the global stage, argued the group. The association is also not keen on Sweden losing its tax sovereignty. “From a principle point of view, the Confederation of Swedish Enterprise is not in favour of introducing a global minimum tax. We believe that it constitutes a serious blow to the principle of tax sovereignty, since it undermines the ability of a country to design its tax system in accordance with its economic policies and priorities,” stated the SN. “This is not in the interest of a small export-oriented country like Sweden. In addition, a global minimum tax will significantly increase the administrative burden for many Swedish companies, even though they already pay taxes at a rate above the proposed minimum level,” continued the group. The SN did concede the “immense international political pressure” for an international tax reform related to the digitalisation of the economy. “All businesses are becoming digitalised, making this a truly global issue requiring a global solution. On these grounds, the Confederation of Swedish Enterprise welcomes the efforts made by the OECD, resulting in a tax package consisting of a two-pillar-based agreement to reform international taxation rules,” it said. But any effort needs to be coordinated on a global basis to make sense. “We are of the opinion that pillars one and two of the OECD/IF agreement must be treated as an integrated package, to be implemented in a concerted way at a global level. If both pillars are not implemented by the US and other major trading partners at the same time as in the EU, then European, and consequently Swedish, businesses could be at a competitive disadvantage. It is thus important that the Swedish government and the EU monitor what is happening in the rest of the world before rushing ahead with the EU implementation,” concluded the group. It seems that the Swedish government has listened to its business leaders, as it joined with Poland, Malta and Estonia to reject the EU effort at a meeting of EU finance ministers (Ecofin) in Brussels on Tuesday, reported news agency Bloomberg. It is now thought that French finance minister Bruno Le Maire will pursue more talks to seek backing at a meeting of finance ministers in April. “We are in the final centimetres of the negotiation, which are always the hardest step to take… We will take another three weeks and I’m sure we’ll get an agreement at the next Ecofin,” Le Maire is reported as saying. Swedish finance minister Mikael Damberg is reported as saying that after discussion with his country’s lawmakers, now is still too early to agree to an approach. The Confederation of Swedish Enterprise will hope that Damberg stands firm in the face of French pressure in coming weeks.

EU minimum corporate tax rules blocked by Swedish government

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