SWEDEN - Sweden has set up a committee to review its pension taxation to ensure it is in line with changing European Union standards.
Sweden’s Ministry of Finance head of pension taxation, Ulf Rehnberg, said the committee was headed up by former Member of Parliament and union leader Barbo Palmerlund.
“If you want to stimulate growth and you want to stimulate people to work longer then you have to see if the system for taxing pensions is in line with those wishes and that is one question,” he said.
“One other question [being considered] is we have problems with the legal technicalities in the system, you have to see if the legislation could be more clear and distinct to describe what is allowed and what is not.”
Rehnberg said it was important to review the whole pension taxation system, not just private and occupational pensions.
He said the committee would examine whether Sweden’s current ETT pension taxation system was in line with the requirements of the EU.
“You are not allowed to have conditions for tax deductions that have a negative impact on the free movement [of workers and capital], that is the general EU directive,” Rehnberg said.
The committee would look at “whether the amount of pension saving is enough in the long term” and ensure Sweden had a system in place that would be effective “for the economy as a whole.”
Last year, the European Comission formally requested Denmark amend its legislation, under which pension contributions paid to non-Danish funds are not tax deductible while contributions paid to domestic funds are.
Official requests for information were also sent to a number of other member states regarding what appeared to be “similar discriminatory tax provisions”, the Commission said.
The Commission stated at the time that action was taken because it considered that preferential treatment for domestic pension funds was “incompatible with the EC Treaty, which guarantees the free provision of services and the free movement of workers and capital”.
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