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Roxette accused of tax fraud

Written by roxeteer on July 10, 2000 to .

The Swedish tax authorities are accusing both Per and Marie of fraud for avoiding 2 million SEK each (approx. 226,000 USD) in taxes. The authorities raided the EMA Telstar office and discovered that the company never paid the agreed royalties for the German part of the band’s Crash! Boom! Bang! world tour (max. 4,500 USD/concert) to Per and Marie. Instead, EMA paid their company, Roxette Produktion AB, 5,6 million SEK (633,000 USD). The tax authorities claim that Per and Marie had an employment contract with EMA Telstar, but they didn’t make the appropriate report of the income. Now they have to pay the income tax and a 40% penalty, making the total 4 million SEK.

A legal representative of Roxette, Mats Nilemar, has announced that the band will appeal the decision. According to Nilemar, it’s even unsure which country the taxes — if there are unpaid taxes — should be paid to.

History of the incident (from Expressen):

  1. During Roxette’s world tour 1994-95, the band plays in Germany.
  2. The Swedish tour promoter EMA Telstar promises their German counterpart Mama Concerts 1,630,000 USD for organizing 19 concerts in Germany.
  3. Their mutual contract states that Per Gessle and Marie Fredriksson won’t get more than 3,000 USD per concert and 1,500 USD per concert rehearsal.
  4. EMA Telstar apply from the German tax authorities freedom from artist taxation. The application is rejected.
  5. The German authorities raid the office of Mama Concerts. The confiscated documents contain many aggravating circumstances and the company becomes involved in a prolonged criminal investigation.
  6. Mama Concerts goes bankrupt. After liquidation of the bankrupt’s estate, many international artists have to pay artist tax to Germany.
  7. The tax authorities in Stockholm raid EMA Telstar’s office in 1997. They find two receipts of payments to Roxette Produktion AB, total of 5,6 million SEK. The amount is about the same as 27% of the income (of the German concerts) which is normal percentage for tour royalties.
  8. At the same time the accounts of Marie Fredriksson and Per Gessle are audited.
  9. EMA Telstar pays 7,4 million SEK additional taxes — and another additional tax of 20%. EMA Telstar claims they have done nothing wrong. “There is no employment contract.” The company has not filed a complaint.
  10. May 17, 2000 Fredriksson and Gessle are both notified of 2 million SEK additional tax. A complaint will be filed.

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