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Swedish trailing taxes and EU-law-an analysis of the Treaty-conformity of the Swedish provisions regarding deferral of capital gains tax on the exchange of shares

Wenehed, Karin LU (2013) JURM01 20132
Department of Law
Abstract (Swedish)
Mål rörande rena utflyttningsskatter har det senaste decenniet varit tämligen frekvent förekommande i EU-domstolen. Detta har i sin tur medfört att, b.la, Kommissionens fokus har riktats gentemot ifrågakommande medlemsstaters utformning/tillämpning av denna typ av skatter då medlemsstaterna i sin strävan att skydda sina respektive skattebaser gärna använder sig av utflyttningsskatter i olika utformningar.

Under hösten 2008 riktade Kommissionen, via en formell underrättelse, sin uppmärksamhet emot Sverige och de svenska utflyttningsskattereglerna avseende framskjuten beskattning vid andelsbyten. Detta då nämnda regler enbart medgav en framskjutning av beskattningen under förutsättning att aktieägaren var bosatt i Sverige. Enligt... (More)
Mål rörande rena utflyttningsskatter har det senaste decenniet varit tämligen frekvent förekommande i EU-domstolen. Detta har i sin tur medfört att, b.la, Kommissionens fokus har riktats gentemot ifrågakommande medlemsstaters utformning/tillämpning av denna typ av skatter då medlemsstaterna i sin strävan att skydda sina respektive skattebaser gärna använder sig av utflyttningsskatter i olika utformningar.

Under hösten 2008 riktade Kommissionen, via en formell underrättelse, sin uppmärksamhet emot Sverige och de svenska utflyttningsskattereglerna avseende framskjuten beskattning vid andelsbyten. Detta då nämnda regler enbart medgav en framskjutning av beskattningen under förutsättning att aktieägaren var bosatt i Sverige. Enligt Kommissionen stred denna lagstiftning både emot den fria etableringsrätten-såsom den fria rörligheten av kapital inom Unionen. De svenska lagstiftarna höll dock inte med Kommissionen i det att lagen stred emot den fria rörligheten för kapital, vilket är den enda av de fyra fundamentala friheterna inom EU-rätten som är tillämplig även gentemot tredje land. Således lämnades denna kritik utan ytterligare utredning. Istället tog revideringsarbetet enbart sikte på att lagens nya utformning inte skulle strida emot den fria etableringsrätten. Den nya utformningen medförde att en framskjutning av beskattningstidpunkten medgavs i alla fall då skattebetalaren, efter andelsbytet, fortsatte att stadigvarande bo- eller vistas inom Europeiska ekonomiska samarbetsområdet (EES). Lagen bytte i och med ändringen alltså skepnad från en renodlad utflyttningsskatt till en ”eftersläpande” skatt.

Fram till idag har Europadomstolen inte dömt i mål rörande ”eftersläpande skatter” på redan realiserade inkomster. Enligt etablerad EU-praxis på området så får medlemsstaterna använda sig av utflyttningsskatter på orealiserade tillgångar så länge som de inte uppställer något krav på att den utestående skatteskulden ska betalas vid utflyttningen utan vid den framtida realiseringen. Detta då cash-flow problematik har ansetts utgöra ett hinder vad gäller att kunna utöva sin fria etableringsrätt. Dock ska den utestående skatteskulden fastställas vid utflyttningen och vidare måste den ursprungliga bosättningsstaten ta hänsyn till värdefluktuationer avseende nämnda beskattningsunderlag om inte denna hänsyn tas i den nya bosättningsstaten. Intressant i detta hänseende är även frågor avseende dubbelbeskattning, - både vad gäller om EU-domstolen anser att eventuell dubbelbeskattning utgör en restriktion till den fria etableringsrätten samt i avseendet hur de inblandade staterna väljer att tolka ingånget skatteavtal. Medlemsstaterna får inte heller pålägga utflyttningsskatter enkom av den anledningen att de anser det praktiskt svårare att indriva den utestående skatteskulden när skattebetalaren bor i ett annat land. Således beror svaret på om den svenska lagstiftningen efter ändringsarbetet kan anses vara i enlighet med den fria etableringsfriheten på utfallet av svaren på en mängd parametrar. Det mest troliga är dock att EU-domstolen vid en granskning skulle anse att den är fördragskonform i detta avseende.

Det finns ingen EU-praxis avseende om den fria rörligheten av kapital kan anses vara tillämplig i fall då omedelbara utflyttningsskatter påläggs EU-medborgare vilka väljer att flytta till tredje land. Intressant är också att om aktieägaren som mottar de tillbytta aktierna redan bor i tredjeland då bytet sker, så ändrar den svenska lagen återigen skepnad. Denna gång ifrån att utgöra en omedelbar utflyttningsskatt till att nu vara en skatt på inkomst av kapital. Med utgångspunkt i den praxis som finns verkar det dock som att de svenska lagstiftarnas ståndpunkt, dvs. att den fria rörligheten för kapital inte är applicerbar i sådana fall, kan ifrågasättas. Dock skulle en inskränkning i nämnda frihet troligtvis anses vara godtagbar av EU-domstolen vid en eventuell prövning. Detta då det är etablerad rättspraxis att rättfärdigandegrunder vilka aldrig hade godtagits i en intra-EU situation, såsom icke-existensen av informations- respektive skatteavtal, har ansetts rättfärdiga inskränkningar i den fria rörligheten av kapital visavis tredje land. (Less)
Abstract
Over the last decade there has been an increase in the number of cases that are referred to the Court of Justice of the European Union (CJEU) with regards to matters of exit taxes. Consequently, this has turned the Commission’s focus towards the outline of the respective exit tax regimes applied in the different Member States (MS). This since the MS, in their efforts to protect their respective tax bases, make great use of exit taxes in various forms.

During the fall of 2008 the Commission, via a letter of formal notification, directed its attention towards Sweden and the Swedish exit tax regime regarding the deferral of capital gains tax on the exchange of shares. This since these provisions only granted a deferral provided that the... (More)
Over the last decade there has been an increase in the number of cases that are referred to the Court of Justice of the European Union (CJEU) with regards to matters of exit taxes. Consequently, this has turned the Commission’s focus towards the outline of the respective exit tax regimes applied in the different Member States (MS). This since the MS, in their efforts to protect their respective tax bases, make great use of exit taxes in various forms.

During the fall of 2008 the Commission, via a letter of formal notification, directed its attention towards Sweden and the Swedish exit tax regime regarding the deferral of capital gains tax on the exchange of shares. This since these provisions only granted a deferral provided that the shareholder was resident in Sweden. According to the Commission, this legislation was contradictory to both the freedom of establishment and the free movement of capital. However, the Swedish legislators did not agree with the Commission regarding that the law was contrary the free movement of capital, which is the only one of the four fundamental freedoms that is also applicable apropos third countries. Thus, this criticism was left without further consideration. Instead, the amendment process only focused on establishing that the new legislation would not be in conflict with the freedom of establishment. Thus, according to the amended law, a deferral is granted in all cases where the taxpayer resides in the European Economic Area (EEA). Accordingly, due to the amendment the law altered from constituting an immediate exit tax to a trailing tax on already realized income.

At current, the CJEU has not delivered any verdicts in cases regarding exit taxes, in the sense of trailing taxes, on already realized income in intra- EU situations. According to established EU practices in the area of exit taxes, MS may levy exit taxes on unrealized income as long as they do not impose a requirement on the tax payer to settle that tax claim at the point of emigration. This is because cash-flow problems have been considered to constitute a hindrance in exercising the freedom of establishment. However, the outstanding tax liability must be established at the time of emigration. In addition, the MS levying the exit tax must take into consideration any future fluctuations in the tax base, if these fluctuations are not considered by the new MS of residence. Interesting in this regard are also questions relating to double taxation - both in terms of if the CJEU considers that double taxation constitutes a restriction to the freedom of establishment and in the respect of how the concerned MS choose to interpret the amidst each other concluded tax treaty. In addition, MS may not impose exit taxes solely for the reason that they consider it difficult to collect the outstanding tax claim when the taxpayer lives in another country. Thus, the answer to the question if the amended Swedish legislation can be considered to be in conformity with the freedom of establishment depends on the outcome of the answers to a variety of parameters. However, the most likely scenario is that the CJEU would consider it to be in alignment with EU-law in this regard.

There is no case law available regarding if the free movement of capital can be applied in scenarios where immediate exit taxes are imposed on EU citizens who choose to move to a third country. What is also interesting is that if the shareholder receiving the exchanged shares is already living in a third country when the exchange takes place, the Swedish law alters its shape again. This time from constituting an immediate exit tax to a regular capital gains tax. In addition, according to recent case law, the position of the Swedish legislator’s that the free movement of capital would not be applicable in such cases can be questioned. However, a restriction of that freedom would probably be considered acceptable by the CJEU. This since it is settled case law that justifications that would never have been accepted in an intra- EU situation, such as the non-existence of tax treaties/Conventions on exchange of information, have been considered to justify restrictions on the free movement of capital vis-à-vis third countries. (Less)
Please use this url to cite or link to this publication:
author
Wenehed, Karin LU
supervisor
organization
course
JURM01 20132
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
EU tax law, exit taxes, trailing taxes, realized income
language
English
id
4239426
date added to LUP
2014-01-15 14:38:44
date last changed
2014-01-15 14:38:44
@misc{4239426,
  abstract     = {Over the last decade there has been an increase in the number of cases that are referred to the Court of Justice of the European Union (CJEU) with regards to matters of exit taxes. Consequently, this has turned the Commission’s focus towards the outline of the respective exit tax regimes applied in the different Member States (MS). This since the MS, in their efforts to protect their respective tax bases, make great use of exit taxes in various forms.

During the fall of 2008 the Commission, via a letter of formal notification, directed its attention towards Sweden and the Swedish exit tax regime regarding the deferral of capital gains tax on the exchange of shares. This since these provisions only granted a deferral provided that the shareholder was resident in Sweden. According to the Commission, this legislation was contradictory to both the freedom of establishment and the free movement of capital. However, the Swedish legislators did not agree with the Commission regarding that the law was contrary the free movement of capital, which is the only one of the four fundamental freedoms that is also applicable apropos third countries. Thus, this criticism was left without further consideration. Instead, the amendment process only focused on establishing that the new legislation would not be in conflict with the freedom of establishment. Thus, according to the amended law, a deferral is granted in all cases where the taxpayer resides in the European Economic Area (EEA). Accordingly, due to the amendment the law altered from constituting an immediate exit tax to a trailing tax on already realized income. 

At current, the CJEU has not delivered any verdicts in cases regarding exit taxes, in the sense of trailing taxes, on already realized income in intra- EU situations. According to established EU practices in the area of exit taxes, MS may levy exit taxes on unrealized income as long as they do not impose a requirement on the tax payer to settle that tax claim at the point of emigration. This is because cash-flow problems have been considered to constitute a hindrance in exercising the freedom of establishment. However, the outstanding tax liability must be established at the time of emigration. In addition, the MS levying the exit tax must take into consideration any future fluctuations in the tax base, if these fluctuations are not considered by the new MS of residence. Interesting in this regard are also questions relating to double taxation - both in terms of if the CJEU considers that double taxation constitutes a restriction to the freedom of establishment and in the respect of how the concerned MS choose to interpret the amidst each other concluded tax treaty. In addition, MS may not impose exit taxes solely for the reason that they consider it difficult to collect the outstanding tax claim when the taxpayer lives in another country. Thus, the answer to the question if the amended Swedish legislation can be considered to be in conformity with the freedom of establishment depends on the outcome of the answers to a variety of parameters. However, the most likely scenario is that the CJEU would consider it to be in alignment with EU-law in this regard.

There is no case law available regarding if the free movement of capital can be applied in scenarios where immediate exit taxes are imposed on EU citizens who choose to move to a third country. What is also interesting is that if the shareholder receiving the exchanged shares is already living in a third country when the exchange takes place, the Swedish law alters its shape again. This time from constituting an immediate exit tax to a regular capital gains tax. In addition, according to recent case law, the position of the Swedish legislator’s that the free movement of capital would not be applicable in such cases can be questioned. However, a restriction of that freedom would probably be considered acceptable by the CJEU. This since it is settled case law that justifications that would never have been accepted in an intra- EU situation, such as the non-existence of tax treaties/Conventions on exchange of information, have been considered to justify restrictions on the free movement of capital vis-à-vis third countries.},
  author       = {Wenehed, Karin},
  keyword      = {EU tax law,exit taxes,trailing taxes,realized income},
  language     = {eng},
  note         = {Student Paper},
  title        = {Swedish trailing taxes and EU-law-an analysis of the Treaty-conformity of the Swedish provisions regarding deferral of capital gains tax on the exchange of shares},
  year         = {2013},
}