Sweden VAT Guide

Introduction

EU-wide VAT legislation was introduced to harmonize the VAT principles of all EU Member States and remove conflicts. Consequently, most Sweden VAT rules correlate with EU VAT Directive 2006/112/EC.

Should you collect VAT in Sweden?

You must collect the Sweden VAT in Sweden if your business is engaged in the following types of activities:

1. Supply of Goods: Supply of goods means transferring the right to dispose of a tangible property as owner.
2. Intra-EU acquisition: Acquiring or purchasing goods within Sweden from another EU Member State as a VAT-registered person (typically known as the Reverse Charge Mechanism).
3. Supply of Services: Supply of services covers any transaction not covered in the supply of goods.
4. Import of Goods: Any transaction that imports goods from a non-EU state to an EU Member State.

To learn more, it is recommended that you visit the VAT Act of Sweden (Section 2). Furthermore, because the VAT laws of most EU Member States are harmonized with the overall EU VAT law (i.e., Directive 2006/112/EC) and also of Sweden, you can refer to Articles 14-30 of the EU tax directive for detailed information on taxable transactions.

When should you register for VAT in Sweden?

Normally, the value-added tax is destination-based (owing to place of supply rules – discussed separately in the One Stop Shop article), requiring every person (whether registered anywhere or not) to register for VAT when making any taxable sales in Sweden. VAT registration in Sweden is necessary for the following types of transactions:

• Supply of Goods or Services in Sweden to non-taxable persons: Sellers must register in Sweden and pay VAT only if they have not opted for One Stop Shop (see Notes 1 and 2 below).
• Supply of Services in Sweden to a taxable person: The recipient of services must register and pay VAT in the country if the supplier is not established in Sweden (under Article 196 of the EU VAT Directive (pg.39)).
• B2B Acquisition of Goods: Where the goods are sold by a taxable person from any EU Country to a taxable person in Sweden, the buyer should register for Sweden VAT (reverse charge basis under Article 197 of EU VAT Directive (pg. 39)).
• Import of Goods in Sweden: The importer must pay and register for VAT (if not covered in the Import One Stop Shop–see our OSS article for details).
• Export of Goods/ Services: Exporting goods/ services to non-EU countries would require a VAT number.

Important Note 1: If you supply goods from other EU Member States to Sweden, you would be required to attain registration for Sweden VAT only if your total annual sales (goods/ services) in the EU are more than EUR 10,000; in contrast, they should be taxed in the supplier’s member state owing to the EU-wide VAT threshold specified for TBE services and distance sale of goods. Refer to our EU One Stop Shop Article for more details, which contains information about the EU-wide VAT threshold and distance sale of goods.

Important Note 2: When you opt for EU One Stop Shop registration, you are exempted from separate registration for Sweden VAT. One Stop Shop applies to the B2C sales made by taxable persons from other EU countries to Sweden of over EUR 10,000 and the import of goods in Sweden below EUR 150. Visit our EU One Stop Shop article for more details.

“Example 1: Company A, a Spain-based company, sells goods to a non-taxable buyer B in Sweden. Company A’s total annual sales exceed EUR 10,000 in the EU, excluding sales in Sweden.

Company A must either register for Sweden VAT (if it does not opt to register for One Stop Shop) or the One Stop Shop.”

Sweden VAT Threshold Summary

To read the official guidance, visit the Section 2 of Chapter 18 of Swedish VAT law.

How can you Register for VAT in Sweden?

To register for VAT in Sweden, you can apply online. The application can be processed in a couple of weeks. The following details must accompany the VAT application:

• Name, address, and nature of business.
• Details of Offices/ facilities including branches, warehouse, etc.
• Bank Account details.
• If a Company is registered elsewhere (or in another EU Member State), the tax office and VAT number under which the Company is registered must be provided.
• Articles of Association.
• Certificate of Incorporation.
• VAT Certificate.
• Power of Attorney when appointing a fiscal representative in Sweden.

Please visit the official website of the Sweden Tax Authority for additional information about registration in Sweden. Although the registration process may sometimes involve cumbersome formalities, you can use TaxDo’s streamlined software without going anywhere else. Just fill out the required information on our software, and we will do the rest.

How should you collect and calculate VAT in Sweden?

VAT is generally charged on a destination-based principle (see the place of supply rules described in the OSS Article), which includes all taxable transactions (described earlier in this article) except those that are otherwise exempt; thus, the VAT Rate is applied to any sales made to Sweden.

VAT Rates

You must charge the VAT Rate of 25%, other than the products/ services you are supplying that are covered under the reduced rates of 12% and 6%. Below is an illustrative list of items covered under the reduced VAT Rate:

For a complete list of reduced-rate goods/ services, refer to the chapter 9 of Swedish VAT Act. Alternatively, the VAT rates in Sweden are available on the EU Commission website.

Certain conditions may apply to the reduced rates, where things get trickier. TaxDo is here for you! Our experts are well-equipped with VAT laws and will resolve all your concerns.

Below is the simple formula you can use to calculate your VAT collection on each merchandise/ service sold:

VAT collectible = Sale value * (Standard Rate or reduced Rate as may be applicable)

Digital Products/ Services

Digital Products are those stored, used, or delivered in electronic format or any such form. You must charge Sweden VAT for such digital products since Sweden’s VAT laws align with EU VAT rules.

The digital products include the following:

• E-books, images, newspapers, movies, periodicals, videos, etc.
• Software-as-a-Service (SaaS), Platform-as-a-Services (PaaS) or Infrastructure-as-a-Service (IaaS).
• Online ads and affiliate marketing.
• Websites, site hosting services, and internet service providers.

VAT Exemptions

The legislation provides certain exemptions from the VAT, such as:

• Medical Care: all goods to be used in medical Care.
• Education: all goods to be used in the field of public education.
• Investment gold: The import of investment gold and securities is exempt from VAT.
• Advertising, periodical bulletins, staff magazines, and periodical publications if published by a non-profit organization.
• Pharmaceuticals, organs, blood, and breast milk, if supplied to public and private healthcare.
• All aviation petrol and jet fuel are exempt from VAT.
• Ships and aircraft: ships for commercial shipping, commercial fishing, towing, or salvaging; airships for commercial transport of passengers or goods; spare parts, accessories, and equipment thereof.
• Supply of goods to an entrepreneur for his business (B2B).
• Exports.

Please visit the VAT Act to see what exemptions are covered.

B2B and Reverse Charge Mechanism in Sweden?

Suppose you are a taxable person from another EU Member State and sell the goods/ services to a VAT-registered person in Sweden. In that case, the transaction is considered a B2B Intra-Community supply, and you are not required to charge the VAT on an invoice raised to the buyer. On the other side of the pond, the Swedish buyer will account for VAT on the intra-community acquisition (under the reverse charge mechanism). The buyer will calculate the input VAT on purchase from another state in the VAT return and show the output VAT for the same amount, allowing him to adjust the tax liability, resulting in a zero VAT payment. Reverse charge is applied under Articles 196 & 197 of the EU VAT Directive.

Likewise, suppose you maintain a warehouse in Sweden from another EU Member State and transfer the goods. In that case, you will need a VAT number in Sweden, and you should account for Sweden’s VAT as an intra-community acquisition under the reverse charge. When filing the return in Sweden, he will show the deemed purchase (input VAT) and deemed sale (output VAT), leading to zero tax.

“Example 2: Company A in France sells goods in Europe. For this purpose, it has set up a warehouse in Sweden. It transfers the goods from France to Sweden Warehouse and sells them in Sweden.

Company A must register and account for Sweden VAT on the stock transfer (considered an Intra-community B2B acquisition). While filing the VAT return in Sweden, Company A will show the input VAT on the intra-community acquisition and report the output VAT for the same amount. This way, the VAT liability would become zero on the stock transfer. Later, Company A must charge and pay Sweden VAT for goods sold to consumers in Sweden.

Should you appoint a fiscal representative in Sweden?

Appointing a fiscal representative is mandatory when you do not have an establishment, registered office, or branch office in the EU and carry out any VAT-exempted or taxable transaction in the country. However, it is optional for businesses based in another EU Member State.

The appointed fiscal representative shall require a power of attorney from the taxable person registered in another EU Member State.  

Fiscal representative appointment and carrying out the transaction may be complex, as any defaults can attract heavy fines and penalties. TaxDo can help you by appointing a fiscal representative and handling all the duties, as we work with leading tax partners in Europe, so we can find it easily.

To learn more about fiscal representatives, visit the official Swedish VAT law (Chapter 22).

How should you file VAT in Sweden?

The VAT declaration frequency in Portugal is as follows:

For more information, refer to the Sweden Official Website.

Filing dates are sometimes extended in exceptional circumstances through a notification by the Swedish tax authority.

Note: If your tax due date is a holiday or weekend, the next business day would be considered the final due date.

You can file the VAT return in Sweden through the online portal or using TaxDo’s specialized software, which seamlessly files, calculates, and reports your taxes. Additionally, if you are selling to other EU Member States and opted for One-Stop-Shop, you must file an OSS return. Refer to our OSS article for further details.

Are there any fines or penalties for default when filing or paying VAT?

If the VAT return is not submitted, the Swedish Tax Agency may decide to do an arbitrary tax assessment and impose a tax surcharge. In case of late payment of VAT, the Swedish Tax Agency will issue a demand for payment and charge interest on the shortage.

However, assigning your tax burden to TaxDo would not result in you paying any penalty or interest. We will adhere to the due dates. Please review the guidelines Sweden issued for penalties and interest.

VAT Invoice in Sweden

A VAT invoice is a testament to how much VAT is charged and collected and evidence of the B2B/B2C supply basis for applying the other rules. Accordingly, the Sweden VAT invoice must include the following information:

• Business Name and Address of buyer and seller.
• Business VAT number issued to the supplier.
• Date of issue.
• Quantity and type (customary trade name) of the goods supplied or the scope and nature of the other service.
• Time of delivery or other service.
• The applicable VAT rate and the amount of tax are attributable to the consideration.

For more details, refer to the VAT Act (Chapter 17).

Important Note 3: For any sales made to a country outside Sweden, you must convert the amounts to your official currency. For this purpose, you can use the European Central Bank’s official exchange Rates.

Keeping Records: You must keep the VAT records for at least ten years under Article 369 of the EU VAT Directive.