SwedenManual

Reverse charge in Sweden

Reverse charge for non-established companies in Sweden

According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on domestic supplies made by non-established businesses. Sweden has introduced this optional reverse charge for domestic supplies of goods and services to customers VAT registered in Sweden.

Domestic reverse charge applies when a non-established supplier supplies goods or services to a VAT-registered business in Sweden.

Conditions to apply the domestic reverse charge on supplies made by non-established companies are the following:

  • The foreign supplier does not have a fixed establishment in Sweden that intervenes in the transaction.
  • The foreign supplier has not opted to be liable to VAT on the supply – voluntary registration.

Regarding the customer, it is not relevant if it is established or VAT registered. Even when the customer is not VAT registered, reverse charge applies, hence requiring this customer to register and account for VAT.

  • Supplier requirements

    Not established in Sweden and not voluntarily registered in Sweden.

  • Customer requirements
    Taxable person VAT registered in Sweden.
  • Scope
    Supplies of goods and certain supplies of services.

Find here official information about reverse charge in Sweden. 

Swedish Reverse Charge on Specific Goods and Services

Domestic reverse charge may also apply to certain goods with different conditions. This regime is often introduced on products that are more likely to be used for carousel fraud purposes.

Swedish domestic reverse charge applies to the goods and services listed below:

  • Supplies of construction works.
  • Supplies of greenhouse gas emissions allowances.
  • Supplies of gold material and investment gold, under certain conditions.
  • Supplies of waste and scrap of certain metals.
  • Supplies of mobile phones, integrated circuits, game consoles, tablets, and laptops between taxable persons, if the supply exceeds SEK 100,000 per invoice

In each of the sections below we provide further information about the corresponding service or product.

Supplies of construction work

  • Scope: Reverse charge applies on supplies of construction services. It includes ground and foundation Works, building and construction works, construction installations, finishing of buildings, and rental of construction and construction machinery with the driver.
  • Customer requirements: it is required that the customer is a company that is not providing construction or ancillary services temporarily.
  • Supplier requirements: supply of goods in scope to customer meeting certain conditions.

Therefore, the VAT registration of the customer is mandatory in case of performing local purchases of construction work, and meeting the above conditions for reverse charge. This reverse charge mechanism applies even if the customer is a foreign company. Find here the official information about this reverse charge.

Supplies of greenhouse gas emissions allowances

  • Scope: Reverse charge applies on supplies of greenhouse gas emission rights. The allowances referred to are those covered in Article 3 of Directive 2003/87/EC. 
  • Supplier and customer requirements: taxable persons who are or must be registered for VAT in Sweden. 

Therefore, the VAT registration of the customer is mandatory in case of performing local purchases greenhouse gas emission rights. This reverse charge mechanism applies even if the customer is a foreign company. Find here the official information.

Supplies of gold material and investment gold

  • Scope: In general, reverse charge applies to supplies of gold. The product must fall under the categories established by the rule: i) Gold materials or semi-finished products with a fineness of at least 325 thousandths; ii) Investment gold provided that the seller is voluntarily liable to tax on the turnover of investment gold according to Chapter 3. Section 10(b) ML.
  • Supplier and customer requirements: taxable persons who are or must be registered for VAT in Sweden.

Therefore, the VAT registration of the customer is mandatory in case of performing local purchases under the current scope. This reverse charge mechanism applies even if the customer is a foreign company. Learn more about this reverse charge scenario.

Supplies of waste and scrap of certain metals

  • Scope: For reverse charge to apply, the product must fall under the categories established by the rule: i) waste and scrap of iron, steel, copper, nickel, aluminum, lead, zinc, tin, and other base metals; ii) remelting ingots of iron and steel; iii) waste and scrap of galvanic elements, batteries, and electric accumulators.
  • Supplier and customer requirements: taxable persons who are or must be registered for VAT in Sweden.

Therefore, the VAT registration of the customer is mandatory in case of performing local purchases under the current scope. This reverse charge mechanism applies even if the customer is a foreign company.

Supplies of certain IT equiments 

Scope: Reverse charge applies on supplies of mobile phones, integrated circuits, game consoles, tablets, and laptops between taxable persons if the supply exceeds SEK 100,000 per invoice. The specific goods under this rule are the following:

  • Mobile phones, that is to say, devices that have been manufactured or adapted for use on an authorized network and at specified frequencies, whether or not they have any other use;
  • Integrated circuit devices, if these have not been integrated into end-use products
  • Game consoles, tablets, and laptops.

Customer requirements: the customer must be a taxable person, already VAT registered for VAT in Sweden.

Supplier requirements: taxable person that is not under the margin scheme regime in Sweden.

Therefore, the VAT registration of the customer is not mandatory in case of performing local purchases under the current scope, but it applies only if the customer is already VAT registered in Sweden. Learn more about this particular reverse charge scenario.

Also, have a look at the official information about reverse charge in Sweden.

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