Swedish star author can be found in Paradise Leak: Withheld 15 million for the Swedish Tax Agency

In the fall of 2017, one of the biggest leaks of confidential financial data in recent years: Paradise Leak. The information in the leak, first revealed by the ICIJ and Suddeutsche Zeitung, showed extensive international tax planning in the low-tax country of Malta.

More than 2,000 Swedish names were included in the documents: Property owners, business people, politicians and sportsmen. Now Cultural News can also add well-known cultural personalities to that list.

The case we have looked at applies to one of Sweden's most successful writers, who have had companies in Malta in recent years. There they have invested a large part of their income during the 2010s. The star author has since made dividends totaling SEK 15 million - but without declaring the income and taxes for them. Something that, according to the Swedish Tax Agency, can be a crime.

At the beginning of the 2010s, the Paradise author stands at the top of his career, after a long series of successful novels. The money from book sales and international rights flows in - but not to Sweden. During the same period, the author instead founded companies in Malta, which have significantly lower corporate taxes than Sweden. Here, tens of millions of SEK will be invested in the coming years.

Running a business abroad is not illegal, and will, in conjunction with Paradise Leak in the fall of 2017, prove to be a relatively common way to reduce tax expenses for several Swedish entrepreneurs. When the information in Paradise Leak is published in the media, however, a debate about tax morality is aroused, and after SVT's disclosure that Swedish Business Chairman Leif Östling is included in the leak, he resigns from his post. This after asking the well-known question "What the hell am I getting for the money?" Regarding the Swedish tax system.

Investing money abroad for tax reasons is also described as a problem by the Swedish government, which believes it is detrimental to Swedish welfare. Since last winter, several measures have also been discussed within the EU to increase transparency in low-tax countries.

This story could have ended here, but it is what happens with the money afterwards that makes the Paradise author stand out from the crowd. Over the years the money flows into the Malta companies, the author is abroad. But after a few years they return to Sweden, and then the companies in Malta start to empty in the form of dividends.

The first year in Sweden lands the figure of SEK 9 million, the second year 3.6 million and the third year 2.4 million, before the companies in Malta are completely wound down. But during the same period, the author does not report any of the payments of a total of 15 million to the Swedish Tax Agency, even though the relevant ones are now written in Sweden.

- If you live in Sweden, you are liable for tax on all income, whether they come from abroad or Sweden. Then you should also declare them in Sweden. If you have paid tax in another country, you may be able to deduct that tax, says Tomas Algotsson, Head of Unit at the Swedish Tax Agency, about what applies to dividends from companies abroad.

- It can be a tax offense if it is money that has not been paid in Sweden, he continues.

In recent months, the cultural news has in vain tried to get an interview with the author, about their views on the payments and whether they have followed Swedish law. The author does not want to put up an interview, but finally we get an email:

“The only activity that occurred after I returned to Sweden was a tough liquidation process. Try opening a bank account in Malta. It will fix itself for a week. Then try to withdraw the money you put in - count on a couple of years, ”the author writes.

The author also thinks that tax has already been paid in the countries where the income has been earned, and that they should therefore not have to declare their dividends in Sweden. The Swedish Tax Agency believes that payments from a company to its owners are subject to taxation, which they consider unreasonable:

According to the Swedish Tax Agency, this can be a tax violation when you do not report dividends from companies located abroad: Have you complied with Swedish legislation in the payments from the holding company?

“I don't understand the tax administration's reasoning. It must reasonably be in the country in which you are written when the income earned is to be taxed. If I live in a country other than Sweden and earn a certain amount of money, tax it and deposit it at the bank, should I then tax again if I withdraw the money after a return to Sweden? No, it must be a misconception ”.

For the sake of clarity, it should be made clear that the dividends made by the author come from a holding company where he is the owner, and not from a bank account that writes them in the email. According to the Swedish Tax Agency, this type of income must be reported, but the author's declarations during this period do not include the 15 million.

“I'm lousy on finances. Others do it for me. Which of course does not mean that I am free from moral responsibility, ”writes the Paradise author in his reply.

How do you view the moral aspect of all this?

“Morality is grayscale. Of course it was financially advantageous to have a company in Malta, otherwise I would never have received the council and never taken it. To the extent that I have been morally / financially doubtful, I would argue that in that case I am a very small fish in a rather turbid pond ”.