Sweden: Million Pound Damages for Wrong Tax Advice

Publication Date01 Mar 1996
AuthorConrad Oberg
subjectMatterAccounting & finance
Journal of Financial Crime Vol. 4 No. 1 International
Million Pound Damages for Wrong Tax
Conrad Oberg
A recent civil court ruling1 heralds a new percep-
tion of tax cases by the Swedish courts. The focus
is shifted from the company owner to the tax
adviser. This opens ways to improve the effective-
ness of tax collection and also the prevention of
irresponsible tax advising. The reputable account-
ancy firm Ernst & Young, with world-wide opera-
is to pay damages of the equivalent of
£1,600,000 to compensate for the effect of failed
tax advice.
Sweden has had the highest taxes of the indus-
trialised nations during the last decades. The 'cause
and effect' syndrome has produced a barrage of
various tax schemes to reduce the tax burden, from
proper and legal arrangements to fraudulent and
criminal cases. Such matters are complicated and
intermediaries have played a crucial role.
The first attempt to bring this under control was
specific legislation during the 1980s.2 This law was
enacted to stop illegal advice from unscrupulous
advisers. Lawyers and accountants were included.
This crime is punishable with a term not exceed-
ing two years' imprisonment. However, ten years
of experience has shown there is a grey field
between legal solutions and the clearly fraudulent
cases where just a small fraction of cases have been
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