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Brussels, 24 July 2007

Direct taxation: Commission launches infringement proceedings against Sweden for its restrictive rules on income tax applied to non-resident tax payers

The European Commission has formally requested Sweden to end discriminatory rules on income tax applied to non-resident tax payers. It considers that the Swedish provision on taxation of non-residents does not respect the free movement of persons, since it does not allow a non-resident having all or almost all his income from Sweden to deduct mortgage interests to the same extent as a resident. Therefore, the Commission requests Sweden to grant the same rights to deductions reserved to residents to non-residents earning all or almost all their income in Sweden. The request takes the form of a reasoned opinion (second step of the infringement procedure provided for in article 226 of the EC Treaty). If the relevant national legislation is not amended within two months to comply with the reasoned opinion, the Commission may refer the matter to the European Court of Justice.

"The rules of the Internal Market forbid any restriction to the free movement of persons between Member States" said EU Taxation and Customs Commissioner László Kovács. "A person who has all or almost all his income from one Member State should not be treated worse because he has made use of his right to free movement".

The Swedish law on taxation of income of non residents (SINK) constitutes a restriction on the free movement of persons guaranteed by the EC Treaty. The law does not allow a person who is not a Swedish resident, but who earns all or almost all of his income in Sweden, to make the same deductions as a Swedish resident.

Non residents that are in this situation are thus suffering from a disadvantage, if they take up residence in another Member State. Such a difference in treatment constitutes a restriction to the free movement of persons, guaranteed by Articles 18, 39 and 43 of the EC Treaty.

The Commission's case reference number is 2005/4910.
For the press releases issued on infringement procedures in the area of taxation or customs, see:
For the latest general information on infringement measures against Member States see:

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