A wage tax on Swedish financial services will reduce the Swedish banks’ competitiveness, whereas a genuine VAT would have a number of positive effects. In three recent studies, Copenhagen Economics has worked on different aspects of the VAT exemption for financial services in Sweden.
In the first study, we find that a wage tax on financial services will compound the existing distortion in the VAT system that inflates the cost of providing credit to businesses and hence undermine the competiveness of financial services based in Sweden.
By contrast, we conclude in the second study that a genuine VAT on financial services in Sweden would improve welfare, lower costs of business investments as well as boost the competiveness of the financial sector in Sweden.
Finally, in the third study, we present a simplified model for bringing VAT to the financial sector, indeed taking advantage of digitalisation of the sector.
For further information, please contact Sigurd Næss-Schmidt