VAT Expert in Europe

Selling in Europe with Incoterm DDP. Eurofiscalis handle your VAT registration & declarations | I want to learn more

VAT Expert in Europe
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VAT Expert in Europe

Selling in Europe with Incoterm DDP. Eurofiscalis handle your VAT registration & declarations | I want to learn more

Selling in Europe with Incoterm DDP.

Eurofiscalis handle your VAT registration & declarations

I want to learn more

Are you and your business dreaming of exploring new markets and expanding to Sweden? Taking the step into Sweden is an exciting opportunity, and it is important to be prepared for the financial aspects of such an expansion. 

In this article, we will focus on Swedish VAT and provide you with thorough information covering everything you need to know to expand your business into Sweden. 

We will explore what Swedish VAT entails, how to register for Swedish VAT, the various rates you need to comply with, and important obligations and deadlines for reporting and payment. 

Content

VAT rates in Sweden

Swedish VAT – also known as “moms,” is an indirect tax imposed on the value of goods and services in Sweden.  

Like many other countries, Sweden operates with different rates depending on the type of goods or services. It is important to be aware of these rates when conducting business in Sweden. Here is an overview of the VAT rates in Sweden: 

The general VAT rate in Sweden is currently 25%. This is the usual rate that applies to most goods and services that are not covered by reduced or special VAT rates. 

There is also a reduced VAT rate of 12% or 6% that applies to certain goods and services. This includes, among other things, food products (except alcoholic beverages), hotel and accommodation services, certain cultural events, and some newspapers and periodicals. 

Some goods and services may have special rates or be exempt from VAT, such as medical services, financial services, and the export of goods outside the EU. 

It is important to be aware of these VAT rates and how they affect your business activities in Sweden. When you sell goods or services to Swedish customers, the correct VAT rate must be applied to your invoices in accordance with Swedish tax rules. 

Register for Swedish VAT

For foreign businesses wishing to sell goods or services to Swedish customers, it may be necessary to register for Swedish VAT. Registration is mandatory if your business reaches or exceeds certain turnover thresholds in Sweden.  

What reasons makes you obligated to register for VAT in Sweden?

If you intend to operate a business that sells goods or services subject to VAT, you must register for VAT. You need to demonstrate that your intention is to run a VAT-liable business with so-called objective circumstances. When applying you need to prove these objective circumstances with evidence such as contracts, invoices, or building plans for premises. 

Here are some examples of objective circumstances 

  • You sell goods or services. 
  • You have purchased assets that can only be used in a business context. 
  • There are premises specifically adapted for business activities. 
  • You actively market your business in an appropriate manner. 

You should also register for VAT if you:

Even if you are exempt from VAT, there may be certain situations where you still need to register for VAT. 

What other considerations regarding registering for Swedish VAT?

Turnover threshold: Swedish companies exceeding SEK 80 000 in the first year is required to register for VAT.  

For foreign taxable businesses no registration threshold exists, implying that you need to register from the first turnover.  

Voluntary registration: Even if the turnover threshold is not reached, there can be benefits to voluntary registration. 

For example, you can receive refunds for Swedish VAT paid in Sweden, and it can lead to greater trust in your business among Swedish customers.

Registration process: Registration is done with Skatteverket, the Swedish tax authorities. The process usually involves filling out a form and submitting necessary documentation, such as the company’s registration certificate. 

Once you are registered for Swedish VAT, your business must apply the correct VAT rate on sales invoices to customers in Sweden. At the same time, you can deduct the VAT you have paid on purchases and expenses related to your business in Sweden. 

Duties and reporting: As a registered VAT payer in Sweden, your business has obligations such as submitting VAT returns and paying VAT to Skatteverket within specified deadlines. It is important to be aware of these obligations and stay updated on any changes in the regulations. 

You must always submit a VAT return, even if you have nothing to declare. Failure to do so may result in a late fee. 

Remember to ensure that the VAT payment reaches the Swedish Tax Agency’s account no later than the due date for the VAT return submission. 

 

Registering for Swedish VAT is an important part of operating your business in Sweden and ensuring your company is in compliance with the law. It can also open up new opportunities and advantages in the Swedish market. 

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Obligations and reporting

When your business is registered for Swedish VAT, there are some important duties and reporting requirements that must be followed to comply with Swedish tax regulations. Here are some key points to be aware of: 

Submission of VAT returns

Submit VAT returns to Skatteverket according to specified deadlines. The returns should report the amounts of incoming and outgoing VAT for a given reporting period. 

 

Normally the reporting period is a calendar month. Quarterly returns can be filed when the annual turnover is less than SEK 40 million. If the annual turnover exceeds the SEK 40 million the VAT return must be submittet on a monthly basis.  

 

Taxable persons with an annual turnover less than SEK 40 million may apply for monthly filings by submitting a request to the Swedish Tax Agency.  

In some cases, a yearly VAT return can be filed. This is if the annual turnover does not exceed SEK 1 million.  

Quarterly VAT returns

  • January – March: 12th of May 
  • April – June: 17th of August  
  • July – September: 12th of November  
  • October – December: 12th of February  

Monthly VAT returns

Due date is the 26th of the month after your reporting period. For example, if your reporting period is for April, your due date is 26th of May.  

Yearly VAT returns

Yearly VAT returns shall be submitted to the Swedish Tax Agency on the 26th of the second month after the end of the reporting period. For September and December, the VAT return shall be submitted on the 28th. For April and July, the VAT return shall be submitted on the 27th. These dates concern yearly VAT returns with a different year end. 

Payment of VAT

The VAT amount must be paid to Skatteverket within the set deadlines based on the reported figures in the VAT return. 

Record keeping and documentation

It is important to maintain accurate documentation related to your VAT accounts, including invoices, receipts, and other relevant transaction documents. This documentation may be requested by Skatteverket during audits or inspections. 

Electronic reporting

Most VAT-registered businesses in Sweden are required to submit VAT returns electronically through Skatteverket’s online portal or other approved electronic platforms. This is only available for those with Swedish e-id.  

For non-EU taxable persons except for taxable persons from for example Norway and Iceland, need to appoint a fiscal representant in Sweden for VAT purposes.  

Importing into Sweden

When it comes to paying import VAT, the process depends on whether you are VAT registered in Sweden.  

If you are VAT registered in Sweden, import VAT is paid through your VAT return, resulting in no cash flow impact.  And although there is no cash flow, the import VAT needs to be declared, and is deductible if the import is related to VAT liable sales. 

 

If you are not VAT registered, the import VAT is paid at the moment of import 

When you export from Norway and import into Sweden, you must pay import VAT. If you are VAT registered in Sweden, you pay the import VAT to Skatteverket (the tax authorities). If you are not VAT registered, you pay it to Tullverket (the customs). The import VAT is calculated based on the taxable value at import. 

You will also need an EORI number to be able to import into Sweden. An EORI number is a unique identification number that is to be used for all customs related activities within the EU, for example when importing from or exporting to a country outside the EU. 

VAT refund for foreign businesses

Foreign businesses that are registered for Swedish VAT may be entitled to receive a refund on Swedish VAT for certain expenses and purchases in Sweden. This can be a valuable opportunity to reduce costs and strengthen the company’s financial position. 

How to claim a refund of Swedish VAT?

When a company is registered for VAT in Sweden and incurs expenses subject to VAT on Swedish territory, it has the option to deduct this VAT from its tax returns. But what’s the process for obtaining a refund of Swedish VAT for companies not liable for tax in Sweden? 

The principle of reciprocity

Companies subject to VAT in EU countries benefit from the reciprocity rule, allowing them to request reimbursement of the VAT they’ve incurred in Sweden. This rule streamlines trade within the EU by enabling companies to recover VAT paid in another member state. 

 

However, for companies outside the EU, the conditions for VAT refunds in Sweden differ. Only companies from countries applying the reciprocity rule are eligible for a refund of Swedish VAT. This means if your business is situated in a country that doesn’t practice reciprocity with Sweden, you won’t qualify for a VAT refund. 

It’s crucial to consider this reciprocity rule when seeking VAT refunds in Sweden. Check if your home country adheres to this rule and ensure you meet the specific conditions for requesting a refund. This rule aims to ensure equitable treatment among companies from various countries and prevent abuse or tax evasion. 

 

Who can receive a VAT refund?

Businesses that are registered for Swedish VAT and have paid VAT on goods and services in Sweden can typically apply for a VAT refund.  

What may qualify for a refund?

VAT paid on business-related expenses such as transport, accommodation, professional services, marketing expenses, etc., may qualify for a refund from the Swedish Tax Authorities. This can only qualify if Swedish company can also get VAT deduction in the same situation.  

The process for applying for VAT refunds

Documentation: Gather the necessary documentation for VAT-paid expenses, such as invoices and receipts. 

 

Application: Complete and submit the VAT refund application form to Skatteverket. 

 

Processing time: The processing time can vary, but it is usually a relatively efficient process. 

Important considerations for VAT refunds

It is important to be aware of deadlines and any requirements that must be met to obtain a VAT refund in Sweden. Incorrect applications can lead to delays or denials. 

By taking advantage of VAT refunds, foreign businesses can reduce their operating costs and improve profitability when operating in the Swedish market. This is an important benefit of being registered for Swedish VAT and can help enhance your company’s competitiveness in Sweden. 

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