Tax rules for sole proprietorships must be easy to understand. Hans Peter Larsson, tax manager FAR and one of the experts in the investigation into simplified tax rules, goes through the most central issues.
In Sweden, sole traders and those running partnerships submit approximately 810,000 tax returns annually. The simplifications currently being introduced are most important for those engaged in agriculture and forestry, and for property owners. However, the rules also affect anyone else wishing to start a business without forming a limited company.
Hans Peter Larsson is the tax responsible FAR and one of the experts in the investigation into simplified tax rules. He believes that understandable rules are an advantage for all parties.
– The investigation has presented a good basic proposal that should be implemented. Today, important new entrepreneurship, including for young people and new arrivals, is being hampered. Accountants and other advisors also find it difficult to give good advice, as the rules are difficult to understand, comments Hans Peter Larsson.
The most important simplifications proposed in the inquiry are:
- The allocation to the expansion fund is being removed. Instead, it will be possible to make a higher allocation to the appropriation fund.
- Negative interest distribution is proposed to be abolished.
- Change in the order of results calculation and company savings.
- Simplified calculation of capital-taxed income from business activities.
"It is important that the proposal is now also implemented, but I know that it has encountered strong objections from the Swedish Tax Agency. Parliament therefore needs support to move forward with it," says Hans Peter Larsson.
The inquiry has two tasks. The first is precisely to propose simplifications for sole proprietors, meaning the interim report which is ready and for which the responses to the referral have been collected. The inquiry will also examine the possibility of greatly simplifying tax rules for people in the gig and sharing economy, a task which is due to be completed on 1 July 2021.
– We are now continuing to develop a method for flat-rate taxation for smaller incomes. If we succeed, it could also become an ”entry-level model” for those entrepreneurs who can then go on to form limited companies, Hans Peter Larsson concludes.
Sofia Hadjipetri Glantz
Read more Simpler rules for self-employed people – here are the first proposals https://www.tidningenresultat.se/enklare-skatteregler-for-egenforetagare-har-ar-de-forsta-forslagen/
This article is published in co-operation with Results magazine.
