Sweden is to cut corporate tax rate to 22 per cent
According to the Federation of Finnish Enterprises, Sweden will get a significant competitive advantage
Sweden has decided to lower its level of corporate taxation to 22 per cent next year.
The current tax rate stands at 26.3%.
The Swedish government explains the decision by saying that the planned reduction in corporate taxes will stimulate the country’s economy.
According to the government, the tax cut will create new jobs and attract investment into the country.
The lowering of corporate taxation will reduce Sweden’s tax revenues by slightly less than EUR 2.0 billion.
In the first half of the year, Sweden reported strong export figures, but since then, the country has been suffering from the eurozone crisis.
In August, 7.2 per cent of the country’s labour force were jobless, while the forecast was 6.8 per cent.
In addition to the eurozone crisis, the strong Swedish crown continues to hamper the country’s exports, a fact that is bound to weaken the competitiveness of enterprises.
In the member countries of the European Union, the average corporate tax rate is 23.4 per cent, while in the OECD countries the average is 25.5%.
In Finland the current corporate tax is set at 24.5%. In 2011 the rate was higher, at 26%.
Managing Director Jussi Järventaus of the Federation of Finnish Enterprises feels that Swedish trade and industry will be given a notable competitive advantage compared with Finland. He characterises the difference between Finland and Sweden as "significant".
”This will impose a strain on Finland”, Järventaus notes.
According to Järventaus, Finland will have to consider a ”bigger leap" in thinking on corporate taxation.
He also says that Finland should turn all eyes to Estonia. In the neighbouring country, companies are taxed only when they issue their profits to the shareholders as dividends.
National Coalition Party MP Sampsa Kataja, who is the chairman of the Tax Sub-Committee of Parliament's Finance Committee, has also argued forcefully that Finland must respond to the tax competition set in train by our neighbour to the west.
Previously in HS International Edition:
Working group wants lower corporate and income taxation, higher taxes on consumption and capital gains (22.6.2010)
Federation of Finnish Enterprises
Finnish Tax Administration: Companies and Organisations