TAXATION : SWEDEN TAKEN TO COURT OVER PENSION FUNDS.

• Position: Brief article

The European Commission, on 9 January, decided to refer Sweden to the EU Court of Justice for its discriminatory pension tax legislation. Premiums paid by employers for pension insurance taken with insurers established in other EU member states or in countries in the European Economic Area (EEA) are treated less favourably than contributions to domestic schemes.

Under the Swedish tax legislation, pension premiums paid by employers for occupational pension insurance taken with insurers established in other EU member states or the EEA countries are taxed as salary in the hands of the employee and pension payments are tax exempt; whereas contributions to domestic schemes are exempt and only pension payments are taxed.

The Commission feels that the Swedish legislation clearly restricts the possibilities for insurers established elsewhere within the EU or EEA to sell insurance policies in Sweden and dissuades...