Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE for Tax Purposes OF INFORMATION FOR TAX PURPOSES PEER REVIEWS, COMBINED: PHASE 1 + PHASE 2, incorporating Phase 2 ratings – SWEDEN Peer Review Report The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by 120 jurisdictions, which participate in the Global Forum on an Combined: Phase 1 + Phase 2, equal footing. The Global Forum is charged with in-depth monitoring and peer review of the implementation incorporating Phase 2 ratings of the international standards of transparency and exchange of information for tax purposes. These standards are primarily refl ected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model P e Tstaaxn Cdaorndvse nhtaioven aolns oIn bceoemne i nacnodr poonr aCtaepdi tianlt oa nthde i tUs Nc oMmomdeenl Ttaarxy Caos nuvpednatitoend. in 2004. The er Re SWEDEN v The standards provide for international exchange on request of foreseeably relevant iew information for the administration or enforcement of the domestic tax laws of a requesting Re p party. Fishing expeditions are not authorised but all foreseeably relevant information must be o r provided, including bank information and information held by fi duciaries, regardless of the t C o existence of a domestic tax interest or the application of a dual criminality standard. m b All members of the Global Forum, as well as jurisdictions identifi ed by the Global Forum ine d as relevant to its work, are being reviewed. This process is undertaken in two phases. P h Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for a s e the exchange of information, while Phase 2 reviews look at the practical implementation of 1 that framework. Some Global Forum members are undergoing combined – Phase 1 and + P Phase 2 – reviews. The Global Forum has also put in place a process for supplementary h a reports to follow-up on recommendations, as well as for the ongoing monitoring of se 2 jurisdictions following the conclusion of a review. The ultimate goal is to help jurisdictions , in to effectively implement the international standards of transparency and exchange of c o information for tax purposes. rp o ra All review reports are published once approved by the Global Forum and they thus represent tin agreed Global Forum reports. g P h For more information on the work of the Global Forum on Transparency and Exchange of a s e Information for Tax Purposes, and for copies of the published review reports, please refer to 2 www.oecd.org/tax/transparency and www.eoi-tax.org. ra tin g s Consult this publication on line at http://dx.doi.org/10.1787/9789264205949-en. S W This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and E D statistical databases. E N Visit www.oecd-ilibrary.org for more information. ISBN 978-92-64-20593-2 9HSTCQE*cafjdc+ 23 2013 66 1 P Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Sweden 2013 COMBINED: PHASE 1 + PHASE 2, INCORPORATING PHASE 2 RATINGS November 2013 (reflecting the legal and regulatory framework as at December 2012) ThisworkispublishedontheresponsibilityoftheSecretary-GeneraloftheOECD. Theopinionsexpressedandargumentsemployedhereindonotnecessarilyreflect theofficialviewsoftheOECDorofthegovernmentsofitsmembercountriesor thoseoftheGlobalForumonTransparencyandExchangeofInformationforTax Purposes. Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusof orsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersand boundariesandtothenameofanyterritory,cityorarea. Pleasecitethispublicationas: OECD(2013),GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeer Reviews:Sweden2013:Combined:Phase1+Phase2,incorporatingPhase2ratings,OECD Publishing. http://dx.doi.org/10.1787/9789264205949-en ISBN978-92-64-20593-2(print) ISBN978-92-64-20594-9(PDF) Series:GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeerReviews ISSN2219-4681(print) ISSN2219-469X(online) CorrigendatoOECDpublicationsmaybefoundonlineat:www.oecd.org/publishing/corrigenda. ©OECD2013 Youcancopy,downloadorprintOECDcontentforyourownuse,andyoucanincludeexcerptsfromOECD publications,databasesandmultimediaproductsinyourowndocuments,presentations,blogs,websitesand teachingmaterials,providedthatsuitableacknowledgmentofOECDassourceandcopyrightownerisgiven. Allrequestsforpublicorcommercialuseandtranslationrightsshouldbesubmittedtorights@oecd.org. Requestsforpermissiontophotocopyportionsofthismaterialforpublicorcommercialuseshallbeaddressed directlytotheCopyrightClearanceCenter(CCC)[email protected]çaisd’exploitationdu droitdecopie(CFC)[email protected]. TABLE OF CONTENTS – 3 Table of Contents About the Global Forum                                             5 Executive Summary                                                 7 Introduction                                                        9 Information and methodology used for the peer review of Sweden            9 Recent developments                                               16 Compliance with the Standards                                       19 A. Availability of Information                                        19 Overview                                                        19 A1 Ownership and identity information                               21 A2 Accounting records                                            44 A3 Banking information                                           51 B. Access to Information                                            55 Overview                                                        55 B1 Competent Authority’s ability to obtain and provide information        56 B2 Notification requirements and rights and safeguards                  65 C. Exchanging Information                                          67 Overview                                                        67 C1 Exchange-of-information mechanisms                             69 C2 Exchange-of-information mechanisms with all relevant partners        76 C3 Confidentiality                                                78 C4 Rights and safeguards of taxpayers and third parties                  80 C5 Timeliness of responses to requests for information                   81 Summary of Determinations and Factors Underlying Recommendations    85 PEER REVIEW REPORT – COMBINED PHASE 1 AND PHASE 2 REPORT – SWEDEN © OECD 2013 4 – TABLE OF CONTENTS Annex 1: Jurisdiction’s Response to the Review Report                   89 Annex 2: List of All Exchange-of-Information Mechanisms               91 Annex 3: List of All Laws, Regulations and Other Material Received       99 Annex 4: People Interviewed During On-Site Visit                      102 PEER REVIEW REPORT – COMBINED PHASE 1 AND PHASE 2 REPORT – SWEDEN © OECD 2013 ABOUT THE GLOBAL FORUM – 5 About the Global Forum The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by over 120 jurisdic- tions, which participate in the Global Forum on an equal footing The Global Forum is charged with in-depth monitoring and peer review of the implementation of the international standards of transparency and exchange of information for tax purposes These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004 The standards have also been incorporated into the UN Model Tax Convention The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party Fishing expeditions are not authorised but all fore- seeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard All members of the Global Forum, as well as jurisdictions identified by the Global Forum as relevant to its work, are being reviewed This process is under- taken in two phases Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework Some Global Forum members are undergoing combined – Phase 1 and Phase 2 – reviews The Global Forum has also put in place a process for supplementary reports to follow-up on recommendations, as well as for the ongoing monitoring of jurisdictions following the conclusion of a review The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of informa- tion for tax purposes All review reports are published once approved by the Global Forum and they thus represent agreed Global Forum reports For more information on the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and for copies of the published review reports, please refer to wwwoecdorg/tax/transparency and wwweoi-taxorg PEER REVIEW REPORT – COMBINED PHASE 1 AND PHASE 2 REPORT – SWEDEN © OECD 2013 EXECUTIVE SUMMARY – 7 Executive Summary 1 This report summarises the legal and regulatory framework for transparency and exchange of information in Sweden as well as the practical implementation of that framework The international standard, which is set out in the Global Forum’s Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information, is concerned with the availability of relevant information within a jurisdiction, the competent authority’s ability to gain timely access to that information, and whether that information can be effectively exchanged with the jurisdiction’s exchange of information partners 2 Sweden is a prosperous northern European country with a popula- tion of slightly above 9 million Sweden has a highly developed, open and export-oriented economy Services accounts for approximately 72% of GDP, followed by industry with 27% and agriculture with less than 1% 3 Sweden has a considerable network of 76 double tax conventions and 38 tax information exchange agreements that provide for exchange of infor- mation in tax matters The vast majority of these agreements are in force and to standard Sweden is also a signatory to the Nordic Convention on Mutual Administrative Assistance in Tax Matters and Joint COE/OECD Convention on Mutual Administrative Assistance in Tax Matters In addition, Sweden is able to exchange information in tax matters with other European Union Member States under EU legislation 4 Under commercial, tax and anti-money laundering legislation compa- nies created under Sweden’s law are subject to comprehensive requirements to maintain and have available relevant ownership and bank information Such information is available for EOI purposes Where nominee ownership is allowed there are also requirements to have ownership information avail- able Issuance of bearer shares is not allowed under Swedish law Partnerships must provide information about the identity of all partners to the Trade Register and to the Swedish Tax Agency Although trusts are not recognised under Swedish law a combination of accounting, tax and AML legislation requires Swedish trustees of foreign trusts to keep information regarding sett- lors and beneficiaries Information with regard to founders, members of the board or managers and beneficiaries of foundations is based on registration requirements and tax law which sufficiently ensure its availability PEER REVIEW REPORT – COMBINED PHASE 1 AND PHASE 2 REPORT – SWEDEN © OECD 2013 8 – EXECUTIVE SUMMARY 5 Swedish accounting law requires all Swedish legal entities as well as branches and subsidiaries of foreign companies to keep adequate accounting records, including underlying documentation, for a minimum of seven years In respect of banks and other financial institutions, Swedish AML, banking and accounting legislation imposes appropriate obligations to ensure that all records pertaining to customers’ accounts as well as related financial and transactional information are available 6 The Swedish tax administration has broad powers to access relevant information from any person and from public authorities Non-compliance can be sanctioned with penalties The confidentiality of bank information is protected by law but is lifted when banks are requested by the Swedish Tax Agency to provide information The tax administration can apply their domes- tic powers, including sanctions, for the purpose of answering international requests for information, including in cases where it does not have an interest in the information for Swedish tax purposes The scope of professional privilege under the Swedish domestic law allows for effective exchange of information 7 Sweden is able to provide all types of requested information in adequate quality and in most cases within 90 days In the period under review (2009-11), Sweden received 494 EOI requests Its organisational processes and resources are adequate to meet the volume of requests it receives and sends In the few cases where Sweden is not in a position to meet the 90 day deadline, Sweden should establish a routine process to update requesting authorities on the status of their requests 8 Overall, Sweden has a long history of very effective EOI for tax pur- poses Sweden is considered to be a very good EOI partner in terms of both timing and quality of communications A follow up report on the steps under- taken by Sweden to answer the recommendation made in this report should be provided to the PRG within twelve months of the adoption of this report 9 Sweden has been assigned a rating 1 for each of the 10 essential ele- ments as well as an overall rating The ratings for the essential elements are based on the analysis in the text of the report, taking into account the Phase 1 determinations and any recommendations made in respect of Sweden’s legal and regulatory framework and the effectiveness of its exchange of information in practice On this basis, Sweden has been assigned a rating of Compliant for each essential element In view of the ratings for each of the essential elements taken in their entirety, the overall rating for Sweden is Compliant 1 This report reflects the legal and regulatory framework as at the date indicated on page 1 of this publication Any material changes to the circumstances affect- ing the ratings may be included in Annex 1 to this report PEER REVIEW REPORT – COMBINED PHASE 1 AND PHASE 2 REPORT – SWEDEN © OECD 2013