VAT Rates in Sweden

VAT rates by goods and services in Sweden

The standard VAT rate is 25%. The standard VAT rate generally applies for all goods and services for which no exemption, 0% or one of the reduced VAT rates is foreseen.

The first reduced VAT rate is 12%. This reduced rate applies to certain food products, hotel accommodations, restaurant and catering services, shoe repair, leather goods, clothing, and bicycles, among others.

In addition, there is a reduced VAT rate of 6%. This reduced rate applies to passenger transport, intellectual property, cultural services (except cinema), books, and newspapers, among others.

Supplies and services at 0% are the standard supplies, such as exports or intra-Community supplies.

Finally, some supplies are VAT exempt, such as health services, pharmaceuticals, and financial services, among others.

To confirm the VAT rate applicable to your product or service in Sweden, we recommend that you contact us.

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Swedish VAT deduction limits

Generally, Swedish VAT can be deducted as long as it is incurred for business purposes and all formalities are met.

The following deduction rules apply:

The input VAT incurred in the following supplies cannot be recovered: purchase of motor vehicles (refundable if intended to be sold or leased, used for passenger transport, driving license education, and transportation of deceased persons); and in general, concerning private expenses.

• Input VAT for the purchase, lease, repair, and fuel for vans with a weight higher than 3,500 KG and trucks is 100% deductible.
• Input VAT for car repair and fuel, and 50% of rental cars used for business are deductible.
• Input VAT for hotel accommodation is 100% deductible.
• Reasonable entertainment costs, including food and drinks, to the extent the cost excluding VAT does not exceed SEK 300 per person is 100% deductible.
• Input VAT on training, conferences, fairs and exhibitions usually is 100% deductible.
• Input VAT for advertising is 100% deductible.
• Input VAT for mobile phone expenses is 100% deductible.
• Input VAT for business gifts with a maximum value of SEK 180 is 100% deductible.

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Swedish Statute of Limitations

The statute of limitations is the period in which the authorities can go back to investigate a tax liability. This is normally the same period in which a taxpayer can go back to request a tax credit.

The statute of limitations in Sweden is six years. This means that both the taxpayer and the tax authorities can request the review of previous reporting periods up to six years prior to the current year.

Similarly, the time limit for taxpayers to request a tax credit is six years in Sweden.

You can find an overview of the statute of limitations in Europe under the following link.

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Swedish Tax Point Rules

The tax point is the time when VAT becomes due in a transaction.

• General rule: Tax point arises when the goods are at the customer’s disposal or when the service is completed. If the total price is paid prior to those moments, then the tax point changes to the moment when receiving the payment.  
• Prepayments: In case of prepayments of all or part of the agreed price, the tax point is shifted to the moment when receiving the prepayment. VAT is due at the end of the VAT return period in which the payment was received.
• Continuous supply of services: Sweden has no specific provisions, so the general rule applies. Only for continuous supplies of cross-border services where the customer is liable to report VAT in Sweden and no payment was performed during more than one year the tax point is deemed at the end of each calendar year.
• Intra-Community transactions: VAT is due when issuing the invoice and no later than the 15th of the month following the physical dispatch of the goods.
• Import: Tax point arises when the goods are released for free EU circulation (customs cleared or outside the customs suspension regime).
• Vouchers: these are instruments for which there is an obligation to accept it as consideration for a supply of goods or services. There are two types of vouchers: “single-purpose vouchers” (SPV) and “multi-purpose vouchers” (MPV). For SPV, the place of supply of the goods or services to which the voucher relates and the VAT due on those goods or services are known when the voucher is issued, and the tax point arises on the transfer of the SPV. This is, when the SPV is used as a means of payment, the supply of goods is made, and/or services are completed when an SPV is transferred. A MPV is a voucher other than a single-purpose voucher. A transfer of an MPV should be considered outside the scope of VAT, while the supply of goods or the provision of services in return for a multi-purpose voucher is regarded as a supply subject to VAT.

VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return.

Use and enjoyment rules in Sweden

Use and enjoyment rules can deviate the place of supply rules according to the country where the service is effectively consumed.

According to the negative use and enjoyment rule, the place of supply is deemed to be Sweden for the following B2C supplies made by a non-EU supplier:

• Supplies of copyrights, patents, licenses, trademarks, and similar rights
• Supplies of legal services, auditing services, data processing, information provision, and similar services.
• Supplies of telecommunication services or radio and television broadcasting through an electronic communication net with a fixed connection in Sweden.
• Supplies of insurance and reinsurance services.
• Grant access to and transmission or distribution through a natural gas system within the community or a gas network connected to such a system, a system for electricity or a system for heating and cooling, as well as services directly connected to it.
• Supplies of marketing and advertising services.

Also, if the supply of gas through the distribution system for natural gas or of electricity is made to any customer that is not a re-seller, it is subject to VAT in Sweden if the use and enjoyment of the gas or the electricity takes place in Sweden.

When the above services are provided to a private customer established in Sweden, the place of supply is Sweden. Consequently, the non-EU supplier must register for VAT in Sweden to charge VAT.

According to the positive use and enjoyment rule, the place of supply is deemed to be outside Sweden if:

• The service is provided to a taxable person in another Member State who either has its business established or a fixed establishment in that other Member State;
• the service is provided from a taxable person in another Member State to a non-taxable person in Sweden;
• the service is acquired by a non-taxable person in a country outside the European Union; or
• if the service is an electronic service, it is provided to a recipient that is established, domiciled or permanently resident outside Sweden.

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