Petter Stordalen has been in court this week in a case he has brought against the Swedish Tax Agency. He has received fierce criticism for his alleged lack of tax ethics.
Finansco partner Eirik Furuseth wrote in a Facebook post that Stordalen’s double standards are laughable.
The Finansco partner referred to Stordalen as having stated that he pays taxes with pleasure.
– The reality is that Stordalen has paid minimal tax, both in relation to income and assets. On the wealth side, he gets away extremely much cheaper than what Olav Thon does, or Kjell Inge Røkke and John Fredriksen would do if they chose to stay in Norway, he wrote further.
Clear rules
Associate professor Eivind Furuseth at the Department of Jurisprudence and Governance at BI says that the tax case is not about morality, but whether Stordalen has bought a company to get a tax advantage or not.
– If I have a million kroner, I can choose to deposit the money in the bank or in a limited company. If I withdraw this money again, this money will not be taxed, because it is already taxed. That is the core of the matter, says Eivind Furuseth to Nettavisen.
He continues:
– But it is not Stordalen that has injected money into the company, it is the previous owners who have done so. Stordalen then bought the company with the deposit. So the question is: Should he be able to withdraw the money tax-free as follows from the main rule in the tax act? If he has shot them in, it is obvious that he can take them out again.
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But what if someone else shot them in, asks Furuseth.
– Then the rules are clear: If money has been injected into the company, it must be possible to take it out again, regardless of whether it is a former or current owner. But if Stordalen has bought the company just to get that tax advantage? What was the purpose of the purchase? That is what the case is about.
Furuseth says that if it was to take advantage of the tax advantage, the circumvention rule can be used. The circumvention rules are a safety valve in the tax law which must ensure that the taxpayer cannot exploit the tax rules contrary to the purpose behind the tax rules.
– But if he has good business reasons for doing it, which he claims he has, then that’s fine. But has he stretched the rope too far and bought that company just to withdraw 800 million?
Legislator’s responsibility
Eivind Furuseth says that as long as Stordalen complies with the regulations, it is fine as a clear starting point.
– He pays the tax he has to. But if, as Stordalen says, there are good reasons to buy the company, then it is up to the legislature to change the rules. It cannot be the case that when the legislator says a and b, we cannot have a moral obligation to do c. We must be able to relate to a and b.
Furuseth compares it to putting the salary in the bank.
– It is money that has already been taxed. If the tax authority taxes this again, it will be double taxation.
The main negotiations in Stordalen’s tax case will end on Friday, the government attorney says.