VAT in Sweden

1. What is the VAT in Sweden?

The standard VAT rate applied in Sweden is 25%. However, a reduced rate of 12% applies in certain conditions. Foodstuffs and accommodation benefit from this reduced rate. An even lower VAT rate of 6% applies for transportations, newspapers and magazines or cultural events. Social services, banking, financial services are among the exemptions from VAT in Sweden.

2. How can I get a VAT refund in Sweden?

Companies in Sweden pay VAT on goods and services, affecting their annual profits. However, any company and entrepreneur, foreign or local, can apply for a VAT refund. In order to do that, there are some criteria that need to be accomplished. First of all, the services or goods on which the VAT is to be recovered should be subject to VAT taxation. The entrepreneur needs to file a claim application to the Swedish Tax Authorities in order to obtain the VAT refund. The application should contain original invoices, as copies are not accepted. Also a certificate of the company status and the VAT form obtained from the Swedish Tax Authorities are needed. The time period required for an entrepreneur to receive the refund is no longer than 6 months.

3. How can I register for VAT in Sweden?

Firstly, one needs to decide whether their company is subject to VAT registration in Sweden or not and if so, commence the registration procedure. The application for VAT registration in Sweden should be submitted after obtaining the registration certificate and at least two weeks before the commercial activity begins. The Swedish Tax Agency provides applicants with a special form that must be completed and submitted at the tax office in the area where the company’s activity is established. In a short time period, the company receives the VAT identification number and the reporting period.

4. How does intra-community VAT work in Sweden?

A company in Sweden may not need to charge VAT for a transaction with another company in EU if it forms an intra-community supply between entities that have been registered in the EU Register, known as VIES (VAT Information Exchange System). If a company appears in this register, then it does not have to include VAT on the invoice for transactions between companies in EU Member States.  The acquisition of goods will be taxed according to the Swedish tax system. If the goods are transported to another Member State, VAT must be paid there.

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