Sweden To Review Transactions With States On EU's Tax Black List

by Ulrika Lomas, Tax-News.com, Brussels

20 March 2018

The Swedish Government has directed the tax agency to review transactions with jurisdictions placed on the European Union's black list of non-cooperative territories in the area of taxation.

The review is intended to establish whether there are transactions taking place between Sweden and black-listed jurisdictions which are being conducted for the sole purposes of avoiding tax rather than for sound economic reasons.

As part of the review, the tax agency has been asked to ascertain whether tax-motivated transactions are associated with the legal shortcomings which led to a jurisdiction's inclusion in the black list.

The review will include transactions with jurisdictions on the black list when the review commenced.

Commenting on the announcement, Minister of Finance Magdalena Andersson said: "In order to maintain the legitimacy of the tax system and to fund the school and health care, every tax crown [the Swedish currency unit] is needed. Therefore, it is important for the EU to continue its efforts to reduce tax avoidance and tax evasion."

The EU black list published on December 5 initially included 17 jurisdictions. However, in the meantime the list has been refined several times and now includes nine jurisdictions – namely American Samoa, the Bahamas, Guam, Namibia, Palau, Samoa, St Kitts and Nevis, Trinidad and Tobago, and the US Virgin Islands.

The European Commission says that it has a range of sanctions available to use against non-cooperative jurisdictions, including restrictions on development funding.

However, the Commission has also encouraged member states to agree on coordinated sanctions to apply at national level against the listed jurisdictions. These include measures such as increased monitoring and audits, withholding taxes, special documentation requirements, and anti-abuse provisions.

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