Value Added Tax (VAT) is an indirect tax that is imposed on the value added to goods and services at each stage of production and distribution. It is a consumption tax that is ultimately paid by the end consumer. In Sweden, VAT is known as “Moms,” which is short for “Mervärdesskatt.” In this article, we will take a closer look at VAT in Sweden, including the rates, exemptions, and registration requirements.

The History of VAT in Sweden:

Sweden introduced VAT in 1969. The original rate was 15%, but this has since been increased to 25%. The revenue from VAT is an important source of income for the Swedish government, accounting for around 35% of total tax revenue.

Who needs to register for VAT in Sweden?

Businesses that supply goods or services in Sweden and have an annual turnover of more than SEK 320,000 (approximately EUR 30,000) must register for VAT. Businesses that are registered for VAT must charge VAT on the goods and services they supply and then pay the collected VAT to the Swedish Tax Agency.

VAT Rates in Sweden:

The standard VAT rate in Sweden is 25%. This is one of the highest VAT rates in the world. However, there are also reduced VAT rates that apply to certain goods and services.

Reduced VAT rates:

There are two reduced VAT rates in Sweden:

12% VAT:

The reduced rate of 12% applies to certain goods and services, including:

• Food and non-alcoholic beverages
• Hotel accommodation
• Books, newspapers, and magazines
• Admission to cultural and sporting events

6% VAT:

The reduced rate of 6% applies to certain goods and services, including:

• Medicines and medical equipment
• Books (other than e-books), newspapers, and magazines for people with reading disabilities
• Public transport
• Certain types of food, including groceries and restaurant meals

Exemptions from VAT:

Some goods and services are exempt from VAT in Sweden. This means that no VAT is charged on them, and businesses that supply these goods and services cannot claim back any VAT they have paid. Some examples of goods and services that are exempt from VAT include:

• Financial services, such as banking and insurance
• Healthcare services provided by licensed medical professionals
• Education and training
• Cultural and sporting services provided by non-profit organizations

VAT Registration in Sweden:

Businesses that supply goods or services in Sweden and have an annual turnover of more than SEK 320,000 (approximately EUR 30,000) must register for VAT. This is known as the “threshold” for VAT registration. However, businesses that have a turnover below this threshold can choose to register voluntarily.

How to register for VAT in Sweden:

Businesses that are required to register for VAT in Sweden must do so with the Swedish Tax Agency. The registration process can be completed online, and businesses will need to provide certain information, such as their name, address, and business activities.

VAT Returns in Sweden:

Businesses that are registered for VAT in Sweden must file regular VAT returns with the Swedish Tax Agency. The frequency of these returns will depend on the size of the business and the volume of their VAT transactions.

VAT Refunds in Sweden:

Businesses that are registered for VAT in Sweden can claim back any VAT they have paid on goods and services that they have purchased for their business activities. VAT refunds can be claimed through the VAT return process.

Conclusion:

VAT is an important source of revenue for the Swedish government, accounting for around 35% of total tax revenue. Businesses that supply goods or services in Sweden and have an annual turnover of more than SEK 320,000 must register for VAT. The standard VAT rate in Sweden is 25%, but there are also reduced rates of 12% and 6% that apply to certain goods and services. VAT exemptions apply to some goods and services, such as financial services and healthcare services provided by licensed medical professionals.

FAQs:

Q. What is the threshold for VAT registration in Sweden?

The threshold for VAT registration in Sweden is SEK 320,000 (approximately EUR 30,000) of annual turnover.

Q. What is the standard VAT rate in Sweden?

The standard VAT rate in Sweden is 25%.

Q. What goods and services are subject to the reduced VAT rate of 12% in Sweden?

The reduced VAT rate of 12% in Sweden applies to certain goods and services, including food and non-alcoholic beverages, hotel accommodation, books, newspapers, and magazines, and admission to cultural and sporting events.

q. What goods and services are subject to the reduced VAT rate of 6% in Sweden?

The reduced VAT rate of 6% in Sweden applies to certain goods and services, including medicines and medical equipment, books (other than e-books), newspapers, and magazines for people with reading disabilities, public transport, and certain types of food, including groceries and restaurant meals.