The conference gave more than a hundred participants from 19 countries a glimpse at how Sweden has become something of a tax haven.
Several speakers emphasized how important it was to carefully prepare ownership transfer. Sweden now has an advantage since preparation does not have to include tax planning and can concentrate on the business aspects.
Estate taxation is almost extinct in Europe, according to a presentation by Krister Andersson, head of Swedish Enterprise’s tax section. In the EU, only France retains it. The average tax on estates and gifts has dropped drastically in recent years. But it has been abandoned only in Austria, Sweden, Slovakia, Estonia and Cyprus.
“Sweden has many small companies and a rather large number of big companies. But we have fewer small and midsize businesses than many other countries. But in today’s advantageous situation for generational change, I think we’ll see many more small companies growing,” Magnus Larsson, chair of Swedish Enterprise’s SME committee.
Several speakers from Germany, France, Norway, Great Britain and the USA talked about a range of problems that Sweden can now avoid. Dick Patten of the American Family Business Institute, said that the threat of losing about half the capital of a family-owned business is leading to investment companies — who avoid these complications in ownership transfers — assuming a larger share of business ownership, the situation in Sweden a few years ago. And in Germany, many company owners are moving capital and ownership to Austria, which like Sweden has a taxation system favourable for ownership.
Paul-Chr. Rieber, president of NHO, the Norwegian equivalent of Swedish Enterprise, complained that Norway was not in a hurry to duplicate the Swedish reform. As Norwegian taxation is at the moment, it will lead to over-investment in property, which is favoured by taxation.
“The debate in Norway shows a lack of insight into the value of active ownership. The red-green parties still need to realize what ownership costs and how economically hard-hit many ownership transfers are,” said Paul-Chr. Rieber.
It is important that the abandoned taxes stay where they are in history books and do not return in another guise.
“If we can trust in stability, there is no reason for companies to leave Sweden,” said Göran Grosskopf, Ikea’s chair.
Rune Andersson, Mellby Gård, was very critical of the Swedish opposition’s plans should they return to power in the September elections.
“What they’re planning seems to be a degressive system, in other words, a system where small capital is taxed hard while the really big fortunes get a far lower tax rate,” said Andersson.
Lars Jilmstad
