VAT payment deferral allowed in Sweden when changing VAT return frequency

The Swedish tax authorities announced that when companies switch between VAT return frequencies, they will be able to defer their VAT payment temporarily.

12 February, 2021


Temporary VAT payment deferral in Sweden

The tax authorities in Sweden updated their rules and regulations for VAT payment deferral options for businesses changing their VAT accounting periods from monthly to quarterly, or vice versa. The new scheme was put in place to help stabilize the cash flows of companies.

When will the change in VAT accounting periods apply?

In Sweden, the frequency of VAT returns depends on the annual turnover. This frequency can change according to ongoing activities, so the tax authorities may request a taxpayer to start filing monthly VAT returns instead of quarterly or vice versa. These sudden changes can bring complications for these taxpayers, so the tax authorities allow a temporary deferral of the applicable deadlines so they can adapt to the new periods. 

The Swedish tax authorities will grant changes per the request of the taxpayer or if they meet certain special requirements. In most cases, the new accounting period will apply after the end of the calendar quarter when the taxpayer is notified by the tax authorities.

What happens when there are not enough VAT accounting periods left in the calendar year?

Deferral of VAT payments will only be allowed for a total of six accounting periods in a calendar year. For those with a monthly reporting frequency, this means a total of six months or a total of two quarters for those with a quarterly reporting frequency.

Sometimes it will not be possible to grant the entire six months of deferral. This could be because the company was in a refund position during one period and there are not enough remaining accounting periods in the calendar year to make a total of six months.

In the case that a company changes its reporting frequency from monthly to quarterly towards the end of the calendar year and they do not have an entire two accounting periods left, an exception will be made. These companies can split their deferral into two optional months from one quarter and another full quarter.

Questions?

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