A new tax agreement that will boost cross-border commuting between Denmark and Sweden is drawing close, according to Swedish finance minister Elisabeth Svantesson.
The agreement on tax cooperation across the Öresund will be “good for both parties”, Svantesson said in an interview with regional newspaper Sydsvenskan.
The Swedish minister said she supported measures that would encourage people who live in Sweden to travel to the Copenhagen area for work, noting high unemployment rates in the Malmö and Helsingborg municipalities relative to elsewhere in Sweden; and a longstanding labour shortage in Denmark.
Despite a recent extension of Sweden’s controls on its border with Denmark, Svantesson said the government wants tax rules that will allow people in Sweden to take jobs in Denmark.
In addition to labour market conditions in the Skåne and Greater Copenhagen regions, the weak Swedish krona is a further factor that could drive workers over the Öresund Bridge.
A Swedish worker could gain as much as a 40 percent payrise by taking an equivalent job in Denmark due to the prevailing exchange rate, according to Sydsvenskan.
“We are currently in discussions with the Danish government about improving the existing Danish-Swedish tax treaty,” Svantesson said on Wednesday following a town hall at the Scandic Triangeln Hotel in Malmö with Swedish Prime Minister Ulf Kristersson.
“The goal is for the new agreement to benefit both Sweden and Denmark,” she said, adding that a deal was “close”.
In the talks, Sweden is asking for all tax rules against Öresund commuters working from home to be scrapped. Stockholm is also asking for a higher proportion of the commuter’s income tax to be received by their country of residence.
Denmark wants rules on living and working either side of the border to be streamlined, including the repeal of a rule requiring cross-border workers to inform Sweden’s tax agency, Skatteverket, of their work situation on a quarterly basis.
They also want guarantees about dividends on pension contributions without high taxation, Sydsvenskan reports.
The demands of each side nevertheless match on a number of points, according to Svantesson, who declined to go into further detail of a possible agreement or a timeline for its announcement.
“I’m not giving an answer to that today. When everything is ready, we will present the results,” she said.
“Our shared starting point is to get a good deal for both parties,” she added.