EU probe into contributions

The European Commission has launched a formal investigation into whether a
reduction in social contributions paid by workers based in northern Sweden breaks
EU state aid rules.

Stockholm allows companies in this region – in a limited number of service
sectors – to cut social security contributions payable for each person by eight
per cent, justifying the reduction because of "additional indirect
distance-related transport costs."

The commission will examine whether this rule is illegal under EU state aid
rules, examining whether the cut can be justified by harsh weather conditions
or low population density.

Sweden argues the rule is justified because these companies have extra
distance-related costs.

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