2. Ministry of Education and Research Sweden Government Offices of Sweden Challenges – Neutron ESS ERIC Maud Bergkvist 1

3. Ministry of Education and Research Sweden Government Offices of Sweden Article 15(1) – ERIC Regulation 1. The setting-up and internal functioning of an ERIC shall be governed: (a) by Community law, in particular the Eric Regulation (b) by the law of the State where the ERIC has its statutory seat in the case of matters not, or only partly, regulated by acts referred to in point (a); (c) by the Statutes and their implementing rules. 2

4. Ministry of Education and Research Sweden Government Offices of Sweden Transfer of business in ESS AB to ESS ERIC - VAT Normally, a transfer of assets in a business is exempt from VAT if the business is transferred to a purchaser that will continue the business This assumes that the purchaser of the business is entitled to deduct VAT or is entitled to a refund in accordance with Chapter 10, paragraphs 9-13 in the Swedish Value Add Tax Law 3

5. Ministry of Education and Research Sweden Government Offices of Sweden Transfer of business in ESS AB to ESS ERIC - VAT With all probability ESS ERIC will not have that right 4

6. Ministry of Education and Research Sweden Government Offices of Sweden Tax relief for foreign key personnel 25 % reduction of taxable income – income tax based on 75% of the income (all salaries and "perks", such as employers' contributions to housing and living costs) Not applicable to Swedish citizens – Nor to residents in Sweden during any of the 5 years prior to the start of the assignment 5

7. Ministry of Education and Research Sweden Government Offices of Sweden Tax relief for foreign key personnel (cont.) Reduction applies to the first 3 years of the temporary stay in Sweden (DK 5 years) All other taxation is the same as that of any other Swedish resident 6

8. Ministry of Education and Research Sweden Government Offices of Sweden Remaining issue – Statutes - VAT Tax exemptions based on Article 143(1)(g)…. shall be limited to purchases of goods and services made by the Organisation as well as to those made by each Member or Representing Entity, acting as such, and acquired for use as in-kind contributions, in direct connection with and for the official and exclusive use of the Organisation, provided that such purchase is made solely for the non-economic activities of the Organisation in line with its tasks. Tax exemptions shall be limited to purchases exceeding the value of 100 EUR. No further limits shall apply. 7

9. Ministry of Education and Research Sweden Government Offices of Sweden Remaining issues – Financial Rules Currency – SEK recommended by KPMG Corporate mortgages Loans – Present Rule: “In principle, the Organisation is funded through contributions of its Members. It is not entitled to take loans unless they are used to cover a short- term deficit of contributions of single Members up to 6 months, the sum not exceeding 10 % of the annual budget (of the operation period).” 8

10. Ministry of Education and Research Sweden Government Offices of Sweden The Swedish Employment Protection Act Employment standard contracts are valid until further notice unless otherwise agreed. Employers free to offer general fixed term contracts for maximum 24 months over a five year period. Beyond this time limit, the contract automatically converts to an indefinite term contract. 9

11. Ministry of Education and Research Sweden Government Offices of Sweden The Swedish Employment Protection Act (cont.) Termination of an employment (both standard contracts and general fixed term contracts) must be based on “just cause”. This can be established either for reasons of redundancy or on “personal grounds”. Personal grounds are reasons that refer to the individual. “Redundancy” comprises reasons not specific to the individual, and includes financial considerations, business restructuring or the closing of a position. 10

12. Ministry of Education and Research Sweden Government Offices of Sweden The Swedish Employment Protection Act (cont.) Deviations from most rules may be made through a collective bargaining agreement entered into or approved by a central organisation of employees (not the rule about “just cause”) 11