Ramblings of the Disenfranchised Labour Partiers
Woooshhh! What's that sound? Irony flying over the head of an American. Thanks for living up to the stereotype. Are you the same hhiusa who somewhere else wrote that their favourite places were (from memory) Stockholm, Copenhagen, Oslo, Hamburg. Brilliant, all places governed by left-leaning social democracies who believe in redistribution to create the sort of peaceful integrated societies you don't think work. Or rather, you want to live in them, but don't want to pay for them.
There are different rules for American Corporations in Sweden than there are for the Swedish and EU residents. In general, I think the Swedish, Danish and Norwegian are an extremely advanced society. They have the lowest crime in the world and the lowest recitivism rate.
Sweden and Denmark have great tax incentives for Americans as most countries want American entrepreneurials dollars.
See KMPG Swedish Taxation For American Businesses.
http://www.icaew.com/en/library/subject-gateways/tax/tax-by-country/sweden
http://www.state.gov/e/eb/rls/othr/ics/2013/204739.htm
Until the mid‑1980s, Sweden's approach to direct investment from abroad was quite restrictive and governed by a complex system of laws and regulations. Sweden’s entry into the European Union (EU) in 1995 has greatly improved the investment climate and attracted foreign investors to the country. The number of foreign subsidiaries in Sweden increased sharply from the mid 1990s, from just over 3,000 to over 10,000 ten years later. Despite substantial FDI inflows, the stock of Swedish assets held abroad still exceeds the stock of foreign assets in Sweden. In 2011, the stock of foreign direct investments in Sweden amounted to 63 percent of GDP.
Taxes
Sweden’s taxation structure is straightforward and
corporate tax levels are low. As of 2013 Sweden has a
corporate tax of 22 percent in nominal terms, lowered from 26.3 percent. The effective rate can be even lower as
companies have the option of making deductible annual appropriations to a tax allocation reserve of up to 25 percent of their pretax profit for the year. Companies can make pre-tax allocations to untaxed reserves, which are subject to tax only when utilized. Certain amounts of untaxed reserves may be used to cover losses.
Due to
tax exemptions on capital gains and dividends, as well as other competitive tax rules such as low effective corporate tax rates, deductible interest costs for tax purposes, n
o withholding tax on interest, no stamp duty or capital duties on share capital (This means no social security tax if you have no taxable income), and an extensive double tax treaty network, Sweden is among Europe’s most favorable jurisdictions for holding companies. Unlisted shares are always tax-exempt, meaning no qualification time or minimum holding of votes or capital. Listed shares are exempt if the holding represents at least 10 percent of the voting rights (or is contingent on the holder’s business) and the shares are held for at least one year.
Personal income taxes are among the highest in the world (
So Swedish citizens pay higher taxes than Swedish Americans and Americans in Sweden). Since public finances have improved due to extensive consolidation packages to reduce deficits, the government has been able to reduce the tax pressure as a percentage of GDP. Currently, it is below 50 percent for the first time in decades. One particular focus has been tax reductions to encourage employers to hire the long-term unemployed. The government introduced additional cuts for personal income taxes in 2008, followed by additional cuts in January 2009 and 2010. Expectations are that the taxes will stay at this level during the year and will not increase or decrease because of the financial instability. In 2011 the breaking point for state taxes increased. It is now only at an income over SEK 32,967 (approx. US$4900) per month that a state income tax of 20 percent will be levied. When earnings exceed SEK 46,741 (approx. US$6900) per month, an additional 5 percent state tax is applied.
One tax reform to help bring foreign experts to Sweden is a reduction of key foreign personnel’s income tax. Under the reform,
only 75 percent of the person’s income is taxable for the first three years of employment in Sweden. Likewise, their employers pay social security contributions on only 75 percent of the taxable salary. This tax relief applies to all salaries and benefits in kind, as well as stock options and other compensations offered by the employer. This applies to foreign key personnel such as executives, researchers, and experts employed by a Swedish company. The tax relief is not applicable to individuals assigned to Sweden by a foreign company that has no operations in Sweden.
This section is the most important of all!
Dividends paid by foreign subsidiaries in Sweden to their parent company are not subject to Swedish taxation. Dividends distributed to other foreign shareholders are subject to a 30 percent withholding tax under domestic law, unless dividends are exempt or taxed at a lower rate under a tax treaty. Tax liability may also be eliminated under the EC Parent Subsidiary Directive. Profits of a Swedish branch of a foreign company may be remitted abroad without being subject to any other tax than the regular corporate income tax. Sweden has no foreign exchange controls or restrictions.
The Swedish system of allowing A and B preferred stock has been identified by some, both in and outside of the EU, as an obstacle to takeover efforts of Swedish companies and the free flow of capital. A and B stocks differ from common preferred stocks in that owners of A stocks have a greater number of votes than owners of B stocks. Both A and B stocks have the same right to dividends.
Incentives: The Swedish government offers certain incentives to set up a business in targeted depressed areas. Loans are available on favorable terms from the Swedish Agency for Economic and Regional Growth (Tillvaxtverket) and from regional development funds. A range of regional support programs, including location and employment grants, low rent industrial parks, and economic free zones are also available. Regional development support is concentrated in the lightly populated northern two-thirds of the country. There are also several European funds that offer subsidies for starting enterprises and a range of incentives to research and development programs provided by the Swedish Government.
Stock options: There is no exit taxation and no specific rules regarding taxation of stock options received before a move to Sweden. Instead,
cases of double taxation are solved by applying tax treaties and cover not only moves within the EU but all countries, including the
United States.:clap: