Ju2009/2865/L1. DG Internal Market and Services, Unit F2 European Commission B-1049 Bruxelles, Belgium.

Transcription

1 Ju2009/2865/L1 Ministry of Justice Stockholm Sweden DG Internal Market and Services, Unit F2 European Commission B-1049 Bruxelles, Belgium Consultation document from the Commission on a possible statute for a European Foundation I General remarks Invited to comment on the Commission s consultation on a possible statute for a European Foundation, Sweden would like to make the following remarks. Sweden welcomes the Commission s initiative to focus on facilitating cross-border activities for foundations. Although all Member States recognize a foundation that has been validly formed in accordance with the laws of one Member State as a foundation, means of facilitating cross-border activities and donations could strengthen the Internal Market and promote trustworthiness. This goal can be reached in different ways. The experiences from existing European legal forms also show that there are some problems when embarking on new projects of this kind. It should be kept in mind that the differences in the underlying national legislative schemes concerning foundations are far greater than the similarities. This could mean that an attempt to reach an agreement on a comprehensive and effective European Foundation statute would prove to be difficult. With regard to the practical challenges, Sweden believes that the issue of a European Foundation needs to be considered further. Sweden would like to make the following factual remarks regarding the feasibility study: On page 19 of the study, the number of foundations in Sweden is said to be However, the exact number of foundations in Sweden is unknown. Larger foundations, business foundations and fundraising foundations must be registered with the County Administrative Board (CAB). At least foundations are registered with the Board. An estimate would

2 be that there are foundations that are not registered. That would give a total of approximately foundations. The description of the Swedish requirements regarding reporting, accountability and disclosure on pages 75 and 76 of the study is not correct. Foundations which have assets exceeding SEK , fundraising foundations and business foundations must prepare and file an annual report that is made available to the public. The accounts must be audited and sent to the CAB. Smaller foundations must prepare simple accounts which must be audited. Their reports do not need to be made publicly available. In March 2009, the Parliament adopted a bill according to which all foundations, with the exception of family foundations, must be registered with the CAB. Foundations which have assets exceeding SEK must prepare and file an annual report that is made available to the public. The new rules will enter into force on 1 January The description of Swedish tax law on pages is not correct. A foreign foundation is entitled to receive the same tax benefits as a tax-exempt Swedish foundation if the foreign foundation fulfils the requirement of Swedish tax law. Sweden grants tax benefits to resident foundations that engage in activities abroad. Activities abroad do not put the tax-exempt status of public benefit foundations at risk. On page 198 of the study, there is a list of public benefit purposes that is said to be accepted in all Member States in both civil law and tax law. However, only scientific activities and research are accepted as public benefit purposes in Swedish tax law. In the following, Sweden presents its position in relation to the different questions in the Consultation document. II The Questionnaire Part I Question 1.1 We agree that the listed difficulties could be regarded as barriers for cross-border activities. Question 1.2 We do not see any further civil law barriers. Question 1.3 At this stage we don t have enough information to rank the barriers. 2

3 3 Question 1.4 and 1.5 No answer. The questions are to be answered by foundations only. Question 1.6 We agree that the listed difficulties could be regarded as barriers for cross-border activities. However, we would like to stress that a foreign foundation is entitled to receive the same tax benefits as a tax-exempt Swedish foundation if the foreign foundation fulfils the requirement of Swedish tax law (1). Activities abroad do not put the tax-exempt status of a Swedish public benefit foundation at risk (2). Question 1.7 We do not see any further tax law barriers. Question 1.8 At this stage we don t have enough information to rank the barriers. Swedish law does not provide tax benefits for individuals who donate money to foundations (3-5). There is no gift and inheritance tax in Sweden (7). Question 1.9 No answer. The questions are to be answered by foundations only. Question 1.10 and 1.12 A foundation which engages in activities abroad needs to handle both civil law and tax law barriers. At the moment we don t have sufficient information to determine whether civil law or tax law barriers are more important. Question 1.11 A foundation which engages in activities abroad may set up additional organizations/structures to minimize administrative expenses. Fundraising foundations might want to establish themselves in another member state to be able to raise funds and reach donors abroad. Question 2.1 We don t see any other options.

4 4 Question As stated above Sweden believes that the issue of a European Foundation needs to be considered further. The need for a statute has to be carefully assessed and analyzed. Question 3.1 Sweden does not object to the five main characteristics of a European Foundation. However, the formation of a national foundation in Sweden does not require participation of a public authority (5). Question 3.2 As stated above Sweden is hesitant about the need for a European Foundation Statute. The need for a statute has to be assessed and analyzed further. Question 3.3 At this stage we don t have enough information to answer this question. Swedish law doesn t require a minimum amount of capital in order to establish a foundation. However, a foundation must have sufficient assets to promote the foundation s purpose. There is also a special type of fundraising foundation for which initial capital isn t required and for which special provisions are made in the Foundation Act. Question 3.4 Freedom of economic activities for a European foundation will make it necessary to have strict rules for governance and an active organization for supervision of European Foundations. However, it s preferable that a European Foundation may engage in economic activities. Swedish foundations may engage in economic activities if this is in accordance with the foundation s statutes. Question 3.5 Sweden believes that public supervision of a European Foundation will be necessary. A statute should incorporate rules for the content and quality of economic reports and accounts combined with auditing. We prefer supervision by the national State supervisory authority in the state where the European Foundation is registered. If a European

5 Foundation Statute includes tax elements, taxation should occur in the same state. 5 Question 3.6 If an existing national foundation will be entitled to transform into a European Foundation this must be in accordance with the will of the founder and the statutes of the foundation. In many cases it would be very difficult to decide whether a transformation is in accordance with the will of the founder as the European Foundation did not exist when the founder made the endowment. Question 3.7 We can not find any other suitable characteristics at the moment. Question 4 No answer. The question are to be answered by foundations only. Question 5 We have no further comments. Lotta Hardvik Cederstierna Deputy Director