nacho

Exactly - I think the value of it is pretty clear in a lot of blogs - 1/100 cent per mile which is roughly equal to 1/100 SEK per mile, which means that every 100 miles you earn via business travel 1 SEK will be added into your total income. If you earn a couple of thousands a year you won't even notice a difference - again this is focus on those who fly C on business trip many times a year.

fassy

Well, even if people fly C a lot... at 1/100 SEK per mile, the tax and social security contributions will be small. Assuming like 500.000 miles a year, you have 5.000 SEK to tax. So probably 2.500ish SEK tax and 1.600 SEK in social security. Hardly worth the effort.

That's why I think they will look at trying to tax the award flights, e.g. trying to valuate 150.000 SEK for the last minute LH F flight FRA-SFO and cash in big.

JR67

Sure we can all take jobs at the grocery store. Most Europeans get their educations for free (i.e. paid or at lease heavily subsidized by the tax dollar). I would imagine that most people who travel a lot have higher productivity and return more money in taxes. So the argumant "You can always work at the grocery store" doesn't hold any water in terms of what is best for society. Do I earn more than a grocery store worker? I think so. Do I pay a lot more taxes? I am pretty sure I do. If I get my education paid by tax-payers and then work in a menial job - is this to the benefit of society? False equivocacy (is this the right word?).

fassy

JR67, I certainly agree with you and (even though probably being in the right age group to also jump on the current mainstream "yeah, let's reestablish socialism! All who failed before just didn't do it right"-band wagon) believe in "work hard, generate value, get paid well" principle. And also think, I'm taxed already to an extend which is ridiculous (and a lot of my taxes get spent on stuff I will never benefit from or support them...).

But at the same time, I think you can hardly justify that getting miles and hotel points for work travel is NOT a benefit you got through your job and employer? Pretty much like people complain that the guys at a grocery store can take discounted stuff which is about to exipire.

All these people never realize that their envy and laziness is the problem. If they want to also get points? Well, qualify by working and studying hard and look for a job which does include a lot of travel... some of the people I know which earn massive amount of miles are actually not even university degree qualified but just hard working Field Application Engineers flying around the world tightening nuts and bolts. Do you want stale cinnamon buns for free? Go work for a bakery. Or don't but then please do not penalize those who do.

GUWonder

This Skatteverket hunt using EBD customer data almost certainly isn't going to burn a typical college/university-educated salaried employee in Sweden anywhere as badly as it will burn the self-employed and others who are employees of firms in which the frequent flying employees have a substantial equity-based controlling stake or other beneficial ownership that often already involves paying way lower tax rates on income than would be true for either a university-educated nurse working in Sweden or a typical, frequent-flying (Sweden-based) university-educated employee of a publicly-traded multinational corporation or other large institution in which the employee has no controlling management influence over the employing-organization/unit.

It was my understanding that a typical 25--30-year old Swedish carpenter can more easily end up paying lower tax rates over the long-haul and will have way more in savings from work by the age of 30-35 than a comparably-aged nurse who had to go for higher education to become a licensed nurse and then the nurse also ends up paying effectively higher tax rates over a lifetime of work than the carpenter who can start earning money for their career without being in classrooms for years on end during their young adult years. And unlike with a flying nurse, a flying carpenter and a variety of other self-employed and quasi-self-employed types can more easily find work without concern of having a professional license pulled (for some offense or another) and having their earning prospects crippled as easily by administrative fiat.

I suspect that Skatteverket will find more frequent flying shenanigans going on for the self-employed and those working for organizations in which the EBD flyer has a de facto controlling stake/role than would be the case for the average frequent flying employee of a large employer.

Neither Skatteverket nor the IRS care about the non-financial stresses /pleasures that come with gainful employment or other matters that may generate tax liability exposure for those subject to their jurisdiction.

Im a new user

Well, you can request a förhandsbesked from Skatteverket. Remember to point out all the limitations such as choice of date of booking and choice of airline.

Well, there was a big scandal a few years ago when Postnord failed to tax the recipients 2 kr for every 8 kr shipment from China. Now they do care about that. There's probably more money earned by taxing frequent fliers than by taxing crap sent by mail from China.

GUWonder

Customs duty due on goods ordered from China for residential delivery was peanuts compared to the value of SK miles earned by Swedish flyers over say 2019? Given the volume (and related value) of goods that come into Sweden from China -- directly or via the European Customs Union -- not sure it would be peanuts and remain so for long.

Why do I expect that may not fly the same way as challenging Skatteverket's assertion -- by simply marking boxes -- on Skatteverket's advance notice of reassessment of the taxable basis of owned immovable property.

fassy

Yes, but for the individual who has to pay 2 SEK in taxes to get his head phone jack ordered from alibaba it looks ridiculous.

True, in my experience asking Skatteverket to do anything were there is not a fixed ruled and a form where you can check of boxes... will get nowhere. I asked them several times how to report my quarterly income for MOMS reporting in foreign currencies since the form only allows for SEK. Waiting for a satisfaction answer on this for over 5 years now. Obviously the first answer was: Ok, just assume the SEK value as average over the reported quarter as reported on some website. But then a year later doing the end of year reporting they made a stink because my bank account statements were off by a few (really just a 2 digits number) SEK due to currency exchange at a rate which of course was slightly different than the average reported before.

Again... as a German.... the German Finanzamt publishes pretty complete list for official exchange rates to use.

GUWonder

Property tax on Swedish homes ended quite some years back, and yet Skatteverket still sends out property reassessment notices. Maybe they can do the same thing with SAS frequent flyer points, if they get around to taxing them: send out a form where the tax subjects can mark boxes to try to dispute the assessment. And then keep sending the forms out even after they give up collecting taxes on such "property".

JR67

Unfortunately it may well be coming back... I assume that is why they kept assessing value - to be ready when they could gouge the taxpayers yet again.

GUWonder

Well, maybe the same Swedish persons/organizations lobbying against the return of such taxes could do a membership drive aimed at SK*S and SK*G customers who want to pitch a fight against being taxed on loyalty program currencies earned during the course of engaging in employer/client-paid activities. Given this is Sweden, I doubt that fight on behalf of business travelers will have enough support to make a difference.

fassy

Wait a minute? There is no property tax at 0.75% of the assed value? But why do I pay it then? Oh, right... they call it "property charge"... Fastighetsavgiften.

GUWonder

Isn't that the municipality property fee/tax of 0 SEK, 4,024 SEK, 8,049 SEK, or .75%, whichever is lower and applicable? Surely there won't be a municipal frequent flyer fee/tax, right?

I guess the Americans here are used to much worse residential property taxes and thus don't really consider any Swedish ones on them to be material. Funny, if not thinking the same thing about the frequent flyer tax that may be coming to hit in Sweden, but then again 40+% tax on award travel value may be brutal in a way even for some EBDs.

JR67

Yeah, that fee is much lower than what my tax would be at 0.75%, so I am happy with it. But the winds are changing and they may well go back to the tax sooner rather than later. In an era of free mobility of labor and capital, real estate is about the only thing they can tax with relative impunity since you can't move it.

GUWonder

I've opened my PM box.

Skatteverket can do math in figuring out assessment value on file. I do wonder if we could be told if Skatteverket IP addresses are hitting up FT like they may be hitting up businessclass.se. Well, we could, even if we won't.

If you sell an old 40M SEK Swedish house and swap for a brand new (i.e. newly constructed) Swedish house in say the same 40M SEK assessment range (or whatever), this "0.75%" fee could be the big zero (0) for some years too IIRC and then is thereafter capped at c. 8000 SEK annually. Unfortunately, that kind of thing with housing will likely work like it does with frequent flyer miles: for the same amount of money in nominal terms, the market gives you (way) less now than you used to get (even a few years back).

Maybe Skatteverket can cut Swedish SK customers a break on taxing redeemed SK points for personal travel due to: a) the SK point devaluations that keep on coming; and b) there being no rule about whether any given point redemption takes place on a LIFO basis, a FIFO basis or some other specified accounting basis applicable to which specific points are being used for any given redemption. This would be less complicated of an issue if it wasn't common for accounts to have point balances built upon co-mingling the personal and business credits. And if someone gets pursued by Skatteverket for tax liability on the use of work-paid trips' points, can they then say they have no liability because they are planning to or have already put back the points into the SK account via personal travel or other personal activity?

If Skatteverket decides to push to tax all personal use of points earned from work-paid tickets, what will happen in the event that there is a work-related point balance remaining in the account of a deceased SK account holder who is part of a point sharing account or group and the manager of the accounts uses those points? Will they be required to go hunt down which points are "work-related" and then settle the tax due for their use?

If they raise taxes too much on a kind of property, the value of the property itself faces downward pressure from that, which then usually ends up reflected in the market-clearing prices for that property category. If there is a de facto tax rise applicable to SK points' use, that too would be a form of devaluation. How will that be reflected in the marketplace? A decreased value on SK points earned from work-travel.