Home HomeSwedenLivingWorld world_2_fill WorldBusiness BusinessSports sports-soccer SportsEntertainmentEntertain

Billionaires may get lower taxes

The Tax Agency has, over a long period of years, taxed and disputed with the country's richest venture capitalists. But now the government can meet the protesting billionaires halfway. Unreasonable, thinks S.

» Updated: 13 September 2024, 01:57

» Published: 26 August 2024

Billionaires may get lower taxes
Photo: Jonas Ekströmer/TT

A new inquiry was set up, in complete silence, three weeks ago, writes Svenska Dagbladet.

And the assignment is clear – the directives cater to the risk capital industry and make it possible to achieve "taxation equivalent to that applicable to income from qualified shares in closely held companies", writes the newspaper.

Niklas Karlsson, Social Democrat and chairman of the Riksdag's tax committee, agrees.

This cannot be perceived in any other way than as a commissioned work, he says to TT.

Earning "unreasonably much"

What they are saying is that these people (risk capitalists) should be taxed less when they earn unreasonably large amounts of money, he continues.

Mats Tjernberg, professor of tax law at Lund University, says the same thing:

As the directive is formulated, it must be seen as a commissioned work from the risk capital industry. I have difficulty interpreting it in any other way. It is likely in line with what the industry demanded in the spring. That is, the profit share should be taxed according to the 3:12 rules, he says to SvD.

The 3:12 rules have also been heavily debated over the years. Critics have thought that they are very tax-favorable for entrepreneurs.

The rules on how risk capitalists should be taxed have been surrounded by uncertainty over the years. So, it is fundamentally good to have an inquiry, but it should be done without preconceptions, thinks Niklas Karlsson.

Inquiry and clarity, absolutely. But no preferential treatment for those with these extremely high incomes.

About billions

What the tax disputes have been about is so-called carried interest, how the profit share that risk capitalists make should be taxed, as work effort or capital gain. In the spring, the Tax Agency taxed 67 risk capitalists with SEK 1.6 billion.

The risk capitalists, led by EQT founder and billionaire Conni Jonsson, have in their disputes with the Tax Agency claimed that the often very large profits should be taxed as capital income, not as work effort and therefore payroll tax.

Unreasonable, thinks Niklas Karlsson.

This is about performance. And performance is taxed as income from employment.

TT has asked Finance Minister Elisabeth Svantesson (M) for a comment, but she has declined due to lack of time.

The long-standing dispute between risk capitalists and the Tax Agency is about what tax rate they should pay on their profits from the deals, so-called carried interest in financial language.

Capital tax of 30 percent, think the risk capitalists.

Payroll tax (tax on income from employment) thinks the Tax Agency. "A performance-based remuneration in the form of carried interest received within the framework of work with funds in risk capital is fundamentally income from employment", writes the agency on its website.

The tax rate on income from employment is 50 percent or more on salaries over approximately SEK 51,000 per month.

Tags
TTT
By TTThis article has been altered and translated by Sweden Herald

More news

The Government Seeks Support for Those Affected by Northvolt
1 MIN READ

The Government Seeks Support for Those Affected by Northvolt

The regional tax will be raised next year
1 MIN READ

The regional tax will be raised next year

Astra Zeneca's China Chief Arrested by Police
1 MIN READ

Astra Zeneca's China Chief Arrested by Police

More rate cuts - but risk of turmoil with Trump
2 MIN READ

More rate cuts - but risk of turmoil with Trump

Svantesson: Trump's policy may increase inflation
2 MIN READ

Svantesson: Trump's policy may increase inflation

Major Banks Lower Mortgage Rates
1 MIN READ

Major Banks Lower Mortgage Rates

Central Bank Economist: Central Bank Cuts Interest Rate Too Late
2 MIN READ

Central Bank Economist: Central Bank Cuts Interest Rate Too Late

How You Are Affected by Lowered Interest Rates
2 MIN READ

How You Are Affected by Lowered Interest Rates

Thedéen expects turmoil after Trump's victory
2 MIN READ

Thedéen expects turmoil after Trump's victory

Inflation upswing does not threaten interest rate cuts
3 MIN READ

Inflation upswing does not threaten interest rate cuts

Stockholm Stock Exchange rises after interest rate cut
1 MIN READ

Stockholm Stock Exchange rises after interest rate cut

Most up on Asian stock exchanges
1 MIN READ

Most up on Asian stock exchanges

This is how your wallet can be affected by Trump's victory
2 MIN READ

This is how your wallet can be affected by Trump's victory

Cheerful on Wall Street after Trump win
1 MIN READ

Cheerful on Wall Street after Trump win

Thousand-kronor notes to be picked up when the Central Bank increases the pace
3 MIN READ

Thousand-kronor notes to be picked up when the Central Bank increases the pace

Swish up and running again after disruption
1 MIN READ

Swish up and running again after disruption

Trump's company is soaring on the stock exchange
1 MIN READ

Trump's company is soaring on the stock exchange

Swedish Export Threatened by Trump Victory
2 MIN READ

Swedish Export Threatened by Trump Victory

Sameby's appeal against mining company rejected
1 MIN READ

Sameby's appeal against mining company rejected

Inflation Expectations Fall
1 MIN READ

Inflation Expectations Fall