An insight into life in the Swedish school system sent by a concerned friend in Sweden who sees his country’s education system going, not so much up in smoke as to the highest bidder. 

UK heading in this direction fast…

Look and learn (and despair):


Sweden: News
Friskolevinst to tax havens Friskolevinst to tax havens
Record profits for friskolejätte
Report
Published 21 December 2011 – 06:00
Updated December 21 2011 – 10:29

Friskolekoncernen Academedia, owned by venture capitalists, made new record profits last year, according to the latest annual report has now been published. SVT’s audit shows that all 900 million of tax revenue is expected to go to interest rates when private equity firm buys new schools.
Private schools

Several of the largest friskolföretagen as Baggium / Practical and John Bauer and Academedia controlled by private equity firms outside Sweden. In total, these three just over 50 000 students.
Baggium owned by Norwegian FSN
John Bauer of Danish Axcel
Academedia owned by the Swedish EQT but is written in the tax haven of Guernsey.
Academedia contains more than 20 school companies Vittra, Fenestra, Didaktus and Rytmus, and late last summer also Pysslingen.

The company is the largest independent school, and last year’s profit was the highest ever – 208 million. Last full-year profit was 2009, and stood at 169 million. This company pays taxes, but the owners, the private equity firm EQT, chooses not to levy any dividend:

-The profit goes instead to improve the quality and to invest in new schools, says Johan Hähnel spokesman at EQT.

Private equity business, investment in schools and health care are often unable to pick out high annual profits, but to encourage businesses to grow and get bigger, and then sell at a hefty profit after a few years. Within EQT is the average of five years before you resell.

Johan Hähnel says that there are no shareholders, or interest in the turbines Academedia. Such arrangements have been with private equity-owned Carema and received strong criticism including the Finance Minister Anders Borg, as they can be part of a sophisticated tax planning.

But there are loans Academedia of around 2.2 billion. Interest costs end up at about 180 million a year. If venture capitalists own the company for five years, it is therefore 900 million just in interest. Money that is paid with the surpluses to build up by taxpayers in the form of the pupil’s wage.

Requirements for return
On top of this, investors get their return.

-Our investors expect a return of 25 percent each year, says Johan Hähnel. So when Academedia sold again after perhaps five years, the value of the company have grown by billions, after the loans are paid, to ensure that investors are satisfied.

The benefits will not provide much taxes in Sweden. Academedia owned by an EQT fund that is written in the tax haven of Guernsey.

-This is done for tax reasons and I think this is bad, said Academedia CEO, Marcus Strömberg to SVT, last week.

Double taxation
Johan Hähnel, believes that the placement of tax havens is not about to evade tax, but is a way of ensuring international investors to avoid double taxation. Will the gains investors have underestimated them in their respective countries, he said.

Previously, SVT and UR reported figures from Teachers showing that private schools owned by companies with lower staffing ratio than public schools and other private schools, run by foundations and nonprofit organizations. Academedia primary activity Vittra has more than six teachers of 100 students while public schools, on average, more than the eighth

But Johan Hähnel mean that profits are not due to too few teachers, but the dedicated employees and the economies of scale.

Johan Zachrisson Winberg
<span title="johan.winberg@svt.se“>johan.winberg @ svt.se

Anders Borg, Swedish Minister for Finance

Sweden: News
Anders Borg: The Act should be amended Anders Borg: The Act should be amended
Borg want to change the law
“Private schools should not be owned by tax havens”
Report
Published 21 December 2011 – 13:56
Updated December 21 2011 – 19:11

After including SVT’s review of private schools that are owned by private equity firms said Finance Minister Anders Borg of SVT that he wants to put an end to Swedish schools are owned by tax havens.
Read more

    Independent School makes record profits

-We will remove the opportunity for them to evade tax on the road and it is obvious that it should be done with great urgency.

Three of the largest independent school owned by venture capitalists, John Bauer, Baggium / practical and by far the largest – Academedia, containing more than 20 school business, which Vittra, Pysslingen and Rytmus.

Ownership located in Guernsey
Academedia owned by the Wallenberg private equity firm EQT. There is a Swedish company, which pays Swedish corporation, but ownership is located in the tax haven of Guernsey in the Channel, “for tax purposes,” according Academedia president. This means that capital gains that can amount to billions of dollars, when you sell on school group, will end up in tax havens.

-Our investors, often pension funds have traditionally chosen to put the ownership in Guernsey, said EQT spokesman Johan Hähnel, to SVT. It does so not to evade taxes, but to avoid double taxation.

“Double tax treaties are not enough”
That there are dubelbeskattningsavtal between most countries is not enough, says Hähnel, but international investors want it in Guernsey because you are confident with their smooth there.

But Finance Minister does not buy EQT’s arguments. The government has earlier this autumn flagged for harsh action and changes in the law against aggressive tax planning with the so-called “interest-tops” that some private equity-owned health care companies, for example. Carema, have used. Now, says Anders Borg, he also wants to create a change in legislation next year that will make it impossible for schools to be owned by tax havens.

It’s worrisome when ownership exported from Sweden. When profits reprocessed in Sweden underestimated abroad, it is in any case difficult, if the addition is tax funded, it is particularly noteworthy, and it is an opportunity that we want to close, says Borg.

This means that EQT, could be forced to move ownership of friskolekoncernen Academedia.

Johan Zachrisson Winberg
<span title="johan.winberg@svt.se“>johan.winberg @ svt.se

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