Swedish VAT

Sweden introduced its Value Added Tax system in 1969.It is termed Mervärdesskatt (Moms) locally and administered by the Swedish Tax Administration (Skatteverket).

 

The basic rules for excise duty in Sweden have been established in the Swedish VAT Act of 1994 (Mervärdesskattelagen), which contains the basic rules for excise duty. This was supported by amendments to the law and decisions of the Commission for Advance Tax Adjudication. The National Tax Board supervises the administration of VAT in Sweden and produces guidance briefs, notices and memoranda. Later in 2011 "tax procedure Law"(Skatteförfarandelagen) further detailed.

 

Sweden is subject to EU VAT rules and is part of the EU's single market economy. The VAT directive is issued by the European Union and sets out the principles of the VAT system adopted by member states, including Sweden. These directives take precedence over local legislation. As a member of the European Union, Sweden is obliged to incorporate the rules of the EU VAT system into the EU VAT directive. This includes details of Swedish VAT registration, compliance, returns and other relevant statements.

VAT registration

Who needs to register for Swedish VAT?

Foreign companies may register for VAT in Sweden without the need to form a local company; this is known as non-resident VAT trading. There is no VAT threshold in Sweden for the registration of foreign traders and a foreign business must register for VAT from the first day of starting activities in Sweden. An application for a VAT number must be received by the VAT Department no later than 14 days before the first taxable supply; this also applies where foreign businesses execute intra-community acquisitions as these may trigger the need to VAT register.

 

Non-EU companies may need to appoint a local fiscal representative in some cases.

 

There are strict rules on the situations where a registration is permitted.Common scenarios which require a Swedish VAT registration include:

• Importing goods into Sweden
• Intracommunity sales (dispatches) or purchases (acquisitions) of goods from another EU country
• Trading (buying and selling) goods in Sweden
• Use of consignment stock warehouse facilities for sales of stored goods to local customers
• Sales from another on the internet (‘distance selling’) to consumers in Sweden, although this is subject to a distance selling registration threshold for Sweden
• Organising and running live events with paid admission on the door
• If a company is otherwise a non-VAT trader, but is receiving services in Sweden under the reverse charge rule
• The self supply of goods
• Following the introduction of the EU’s 2010 VAT Package, and change in the place of supply rules, there are limited scenarios where a Swedish VAT registration is required for the supplies of services.

What information is required to get a Swedish VAT number and registration?

The Swedish tax office will require the appropriate forms to be completed and submitted with the following documentation:

• A certificate of incorporation
• A copy of the passport (for sole traders only)
• A power of attorney for the fiscal representative (if applicable)

VAT rates

The Swedish VAT system is harmonized with EU rules and has different VAT rates for different categories of goods and services. Sweden's value-added Tax law provides for the application of a standard VAT rate of 25% and VAT relief rates of 6% and 12%. The general VAT rate for most goods and services is 25%. Discounts are available on certain goods and services, such as hotel accommodation, food (non-alcoholic beverages), restaurant meals and light or non-alcoholic beverages (12%), as well as newspapers, magazines, books, e-books, passenger transport, maps, music notes, some cultural services, ski lift transport, etc. (6%). Examples of exempt supplies are health care, financial services and education.

 

It also includes categories of goods and services with zero rate and VAT exemption into the VAT law. In Sweden, VAT free supply indicates that the supply is not charged VAT and there is no option to choose input VAT.

 

Rate	Type	Categories of Products or Services
25%	Standard	All other taxable goods and services
12%	Reduced	Some foodstuffs; non-alcoholic beverages; take away food; minor repair of bicycles, shoes and leather goods, clothing and household linen; hotel accommodation; restaurant and catering services; some works of art, collectors items and antiques
6%	Reduced	Books, periodicals, newspapers, brochures, children’s picture or drawing books, music notebooks, and maps. Admission to and live recordings of certain performances. Products aiding people with disability. Entrance fees to zoological gardens.  A legal right to intellectual property that is granted or transferred (excluding photography, advertisements, IT software, movies, or videos). Sporting event-related services provided by a taxable person.  The transport of passengers.
0%	Zero	Intra-community Supplies. Export of goods or services. Supply of goods to central banks Periodical magazines for members of a nonprofit organization. Prescription drugs Human organs, breast milk, and blood Gold bars given to the Swedish central bank. Supplies to Swedish Armed Forces. hips that are used on the open ocean in addition to the equipment, commodities, and services that are associated with them. Aircraft, as well as components and equipment for aircraft, that are intended for use by airlines in international commercial travel and other activities linked to aviation.

VAT compliance

Once a non-resident Swedish VAT registration has been received, companies are obliged to follow the local rules on VAT bookkeeping and rates.  This includes:

 

• Disclosure requirements for invoices as outlined in the Swedish VAT Act.
• Proper invoicing for goods or services in accordance with the Swedish time of supply VAT Act.
• Use of electronic invoices, and approvals by customers
• Maintenance of accounts and records, which must be held for at least seven years.
• Processing of credit notes and other corrections.
• Use of approved foreign currency rates.

VAT return

Regular Swedish VAT returns are required from non-resident traders with a VAT number. These are required to report taxable transactions in Sweden, and to report any VAT due/refund from the tax payer.

 

How often are Swedish VAT returns required?

The thresholds for VAT reporting periods in Sweden are as follows:

• Monthly VAT returns - annual turnover above SEK40m
• Quarterly VAT returns - annual turnover between SEK1m and SEK40m
• Annual VAT returns – annual turnover below SEK1m (if required to submit VAT returns)

 

What are the deadlines for filing Swedish VAT returns?

Monthly Swedish VAT returns are due on the 26th day of the month after the end of the return period. The December return is due on the 27th day of the month.

 

Quarterly VAT returns are due on the 12th day of the second month after the end of the VAT return period. If the return is due on in January or August it must be submitted by the 17th day of the second month after the end of the return period.

 

Annual VAT returns are due on the 26th day of the second month after the end of the VAT return period or the 27th day of the second month if the return is due in December.

 

Any Swedish VAT due must be paid at the same time.

 

Swedish VAT penalties

Late submission of VAT returns may incur penalties of between SEK500 and SEK1000 for a single late filing. There is no penalty for the late payment of VAT but interest (currently charged at Swedish National Bank base rate plus 15% per year) is charged on the VAT due until the date of payment. Incorrect or inaccurate returns may trigger a penalty of 20% of the incorrectly reported VAT.

 

VAT Recovery

The Swedish VAT Act provides a VAT recovery scheme wherein taxable persons can reduce the VAT liability by claiming an “input VAT”. Input VAT is the VAT paid on certain purchases for business purposes.VAT is recoverable on taxable acquisitions of the business and it may be subject to standard, reduced rates or be exempt (zero-rated). There are certain conditions applied.

 

To recover input VAT, taxable persons must have all required documentation, including invoices with complete information.

 

Among the types of input tax are:

• VAT charged on goods and services supplied in Sweden.
• VAT paid on imports of goods
• VAT self-assessed on intra-Community acquisitions of goods and reverse-charge services.

 

Restrictions

Exempt supplies and irrecoverable expenses are not considered as input VAT.

 

Mixed Business

If a business is engaged in both taxable and exempt supply goods and services, a partial deduction also applies. Only deduct the taxable portion of input VAT.

 

VAT Refund

Deadline for refund claims:

• EU---30 September of the year following the year in which the invoice was received by the claimant.
• Non-EU---30 June of the year following the year in which the invoice was received by the claimant.

 

Filing Procedures

EU and Non-EU registered in Sweden

• Businesses in the EU must electronically file refund claims through the electronic portal set up by the Member State in which the business is established. The application will be then transferred to the Swedish Tax Agency.
• It must not be established in the Member State of refund.
• It must not have a fixed establishment, seat of economic activity, place of business or other residence in the Member State of refund.
• The claimant must not have made any supplies of goods or services in the Member State from which the refund is claimed (subject to certain exceptions) during the refund period.
• A claim must be worth at least SEK 4,000, and annual claims must be worth at least SEK 500. The refund will be in Swedish Kronor (SEK).
• Invoices are not required unless requested by the Swedish Tax Agency.The taxable and VAT amount must be stated in SEK. The authorities may inspect the original invoices or copies of them in certain instances.
• The Swedish Tax Agency will email about the decision within four months of the claim date. However, if there is more information needed, the process may take longer.

 

Non-EU not registered in Sweden

• Non-EU and unregistered in Sweden businesses may claim VAT refund by using the appropriate forms which must be filed on paper.
• Claims should be submitted in Swedish, English, French, or German.
• The refund application must be supplemented with the necessary paperwork.
• The claimant must provide a document certifying that he or she is registered as a taxable person with a tax identification number.Must be issued within twelve months.
• All sums of money must be stated in Sweden’s local currency – Swedish Kronor (SEK).
• A claim must be at least SEK 4,000 and annual claims must be at least SEK 500.    The refund will also be sent in Swedish Kronor (SEK).
• The Swedish Tax Agency will notify about the decision within six months from the day of receiving the complete application with all the supporting documents.
• The Swedish Tax Agency will not provide any interest in the event of a delayed VAT refund.
• Applications for Swedish VAT refunds by non-EU enterprises must be directed to the Swedish Tax authority’s address.

 

invoice requirements

Swedish VAT obligations for the layout and disclosures to be made on invoices conforms with the EU VAT Directive and its VAT invoice requirements.

Date of issuance and storage of Swedish invoices

Swedish VAT invoices must be issued according to generally accepted accounting principles. However, in the case of intra-Community supplies an invoice must be issued no later than the 15th day of the month following the month of supply.   Swedish invoices must be stored for seven years. Sweden now permits the use of electronic invoices under certain conditions.

 

Swedish invoice requirements

Invoices must contain at least the following basic information:

 

• Date of issuance
• A unique, sequential number
• Swedish VAT number of the supplier
• Full address of the supplier and customer
• Full description of the goods or services provided
• Details of quantities of goods, if applicable
• Unit prices, if applicable
• Explanatory reference to reverse charge mechanism (if applicable)
• Details of the fiscal representative (if applicable)
• A date of the supply if different from the invoice date
• The net, taxable value of the supply
• The VAT rate(s) applied, and the amount of VAT broken out by rate
• Total VAT amount in SEK (unless the business uses EUR as its accounting currency)
• The gross, total amount of the invoice
• A simplified VAT invoice can be issued under certain circumstances e.g. businesses with supplies in Sweden of less than SEK4,000.