The Author of the VAT Guide
VAT REGISTRATION IN SWEDEN
When do you have to register for VAT?
It is mandatory for your company to apply for VAT registration with the Swedish tax authorities before starting your activities. Financial penalties may apply if the application for registration is submitted late.
What documents do I need to provide when I register?
If your company wishes to register for VAT in Sweden, it is essential to contact the Swedish tax authorities. There is no need to contact the tax authorities in your country of establishment.
In particular, your company will need to submit the following documents:
- The VAT registration form(s) completed in the language of the country
- A copy of the articles of association
- An extract from the trade register
- A certificate of VAT liability
- Power of attorney (if using a fiscal agent)
- Proof of activity on the territory of the country concerned: a contract, an order form, etc.
The Swedish tax authorities may require some of these documents to be translated into Swedish.
How long does it take to get a VAT number?
If your file is complete, it generally takes one month to obtain the VAT number.
Is a fiscal representative necessary?
Non-European companies cannot register for VAT themselves in Sweden. They have to do it through a VAT representative. This is a local company that will represent you to the local VAT authorities. He is responsible for the respect of all your VAT obligations, including those of which he was not aware. For this reason, he may require a deposit (e.g. a bank guarantee) from you before accepting the representation assignment.
European companies are not obliged to appoint a VAT representative. However, to facilitate their relations with the local tax authorities, they may appoint a proxyholder (agent) to carry out the tax formalities on their behalf. In this case, it is not necessary to issue a bank guarantee. The company remains solely responsible for paying its VAT debts.
VAT OBLIGATIONS IN SWEDEN
Is it necessary to keep VAT accounting ledgers?
Your company must keep ledgers sufficiently detailed to enable the application of VAT and its control by the Swedish tax authorities.
When do you have to file a VAT return?
- Your company is required to file periodic VAT returns on a monthly basis if your business's annual revenue subject to VAT is more than SEK 40 million, or if you have requested monthly settlement yourself.
- Your company is required to file periodic VAT returns on a quarterly basis if your business's annual revenue subject to VAT does not exceed SEK 40 million.
The VAT return must be filed electronically between the 1st of the month after the return period and the 12th of the second month following the tax period. Large companies [turnover exceeding SEK 40 million] must always report VAT on the 26th of the month after the return period.
The VAT expert's eye
Member States set the duration of the taxable period at one, two or three months. However, they may set different periods provided they do not exceed one year. The VAT return must be submitted within a period to be determined by the Member States. This deadline may not be more than two months after the end of each taxable period (Art. 250 of the VAT Directive).
Do I have to submit an annual return?
Your company is not required to file an annual recapitulative VAT return.
The VAT expert's eye
Member States may require the taxable person to file a return containing all the data referred to in Articles 250 and 251 and concerning all transactions carried out during the previous year. This return shall include all the information necessary for any adjustments. They authorize, and may require, the return to be made by electronic means under conditions which they determine (Art. 261 of the VAT Directive).
What is the deadline for paying Swedish VAT?
The company must pay the VAT due has the same deadline as the VAT return. If you do not pay on time, Danish VAT authorities will charge interest for late payment.
The VAT expert's eye
Every taxable person who is liable for the tax must pay the net amount of VAT when filing the VAT return. Every taxable person who is liable for the tax must pay the net amount of VAT when submitting the VAT return. However, Member States may set a different deadline for the payment of this amount or collect instalments (Art. 206 of the VAT Directive).
When should the intra-EU statement be filed?
The company is obliged to file an electronic intra-Community listing at the latest on the 25th day of each month.
The Swedish VAT authorities may decide, in some cases, that the ESL must be submitted once per calendar quarter. A condition for this is that the value of the intra-EU supply of goods does not exceed SEK 500.000 for the current calendar quarter or any of the previous four calendar quarters.
The eye of the VAT expert
A recapitulative statement is drawn up for each calendar quarter within a period and according to procedures to be determined by the Member States. However, Member States may provide for recapitulative statements to be submitted on a monthly basis. Member States may allow, and may require, recapitulative statements to be submitted electronically under the conditions they determine (Art. 263 of the VAT Directive).
When should the Intrastat declaration be submitted?
INVOICING RULES IN SWEDEN
Does the invoice have to include VAT? Reverse charge?
As a supplier of goods or services, your company is normally obliged to issue an invoice with VAT to its customer. This is the general rule. However, there are many derogatory situations which transfer this obligation to pay tax to the customer himself. These situations are known as "reverse charge" situations.
The special reverse charge rules have been introduced in Sweden for foreign companies:
For supplies of goods:
The reverse charge is applicable to all supplies of goods made by a business not established in Sweden, provided that the customer is VAT registered in Sweden.In case the foreign supplier has opted to register for VAT, reverse charge mechanism is no more applicable.
For supplies of services:
The reverse charge is only applicable to certain supplies of services connected to real estate, provided that the customer is VAT registered in Sweden.In case the foreign supplier has opted to register for VAT, reverse charge mechanism is no more applicable.
What are the mandatory mentions on an invoice?
The VAT Directive lays down the minimum information that you must include on your invoice. In some cases, countries may add additional compulsory information. Particular attention should be paid to the conversion rates when the currency used on the invoice is not that of the country in which the transaction takes place, and to the specific statements justifying the legal reason why VAT is not charged.
What VAT rate should be mentioned on an invoice?
Sweden has 3 differents VAT rates :
- Standard rate : 25%
- Intermediary rate : 12%
- Reduced rate: 6%
VAT REFUNDS IN SWEDEN
How can I recover VAT in Sweden?
There are several methods to obtain refunds of Swedish VAT. The practical formalities for reclaiming foreign VAT will differ depending on whether or not your company is established in Europe and/or is identified for VAT in Sweden:
- If your company has a VAT number in Sweden, it will have to submit a refund application in the form and within the timeframe required by local regulations. In principle, the VAT credit is automatically carried forward to the next period. At the request of the taxpayer, the VAT surplus is refunded within 31 days of submission of the tax return.
- If your company is established in a European country and does not have a VAT number in Sweden, it will have to apply for a VAT refund electronically from its country of residence, in the form and within the time limits required by Directive 2008/9.
- If your company is established outside Europe and does not have a VAT number in Sweden, it will have to appoint a tax representative to submit its refund application in the form and within the time limits required by the 13th Directive.
Is Swedish VAT recoverable on all expenses?
VAT incurred on purchases, imports or intra-Community acquisitions of goods and services can be reclaimed by a foreign company provided that these expenses are for taxable activities and provided that the appropriate documentation is available.
As from 01/01/2017, the deductibility of input VAT on expenses relating to lunch, dinner, dinner parties or other refreshments has been limited [maximum of SEK 300 per person per event].