Administering Swedish VAT

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Administering Swedish VAT Value Added Tax (VAT) is called MOMS in Sweden. VAT and VAT refunds are reported as part of the monthly tax declaration that Swedish Resident companies and other organizations are required to complete each month. For Representation companies and organizations, VAT refunds are requested using Form SKV 5801. For Resident organizations, The MOMS subject to a refund is first applied towards social taxes that are owed by the organization with any remainder paid back to the company as a VAT refund. The standard VAT rate in Sweden is 25 percent with two reduced rates of 12 and 6 percent respectively. The 12 percent rate applies to food, hotel accommodations, camping, newspapers, books, magazines, cultural and sporting events. The 6 percent VAT rate applies mainly to passenger transportation and publications. Certain goods and services are exempt from VAT such as: medical, dental and social care, education, banking and financial services, and certain cultural and sporting activities. All VAT at the retail level, no matter the rate, is always included in the price to the consumer. The net of received VAT and declared and paid VAT is to be paid to the Swedish National Tax Board. Thus, VAT is never an expense to the company. Operating Outside Sweden When selling goods or services to a foreign company within the EU, a Swedish company does not charge VAT if the buyer is registered for VAT in his home country. When selling to a private person the Swedish company must charge VAT. When exporting goods or services to a foreign company or to private persons outside the EU, a Swedish company does not charge VAT. VAT Refunds You can get a refund of VAT on goods and services that are purchased in Sweden if you are a foreign entrepreneur that is not required to be registered for VAT in Sweden (e.g. a Representation Company or Organization). For Representation organizations, the VAT refund process typically takes 3 to 6 months and requires that the original invoices for the goods and services purchased be submitted along with the application (Form SKV 5801). Rules for VAT Refunds The following conditions must be fulfilled for the VAT to be refunded to you: The VAT must be on the purchase (acquisition) or import of goods or services for your business in other countries than Sweden. Your sale (turnover) would have been subject to VAT, or would have entailed the right to a refund if it had taken place in Sweden. If your sale (turnover) takes place in another EC country then it is subject to VAT or entitles you to a refund in that country. This condition applies to applications received from 1 July 2003. As a foreign entrepreneur, you can also get a VAT refund for goods or services that you sell (turn over) in Sweden when a VAT-registered buyer is tax-liable for the turnover (known as "reversed charge"). Limitations You are not entitled to repayment if the Swedish VAT regulations prohibit deduction. In Sweden, there are limitations on the right to deductions for, among other things, cars and business entertainment. If you run a travel agency business, you are not entitled to a refund for goods and services that directly benefit the traveler, such as hotel rooms, restaurants and personal transport. If you have not sold the goods or services but have simply acted as an agent, you can only claim a refund if your principal would have been entitled to a refund if he had acted in his own name. If the agency work took place in several stages, each stage must have been entitled to a refund. As the person applying for a refund, you must show that this right existed. When can repayment take place? You are entitled to repayment no earlier than the point at which goods have been delivered to you or brought into Sweden. A service has been provided to you. You have paid in advance for ordered goods or services. Application for a Refund You apply for a refund using Form SKV 5801. Your application must be received by the Swedish Tax Agency no later than 30 June of the following calendar year. The application is to cover at least three and no more than twelve consecutive calendar months. An application must never refer to different calendar years. If the application covers a period up to the turn of a year, it may apply to a shorter period than three months. Your application is to be accompanied by your VAT registration certificate or equivalent document. The certificate or its equivalent must not be older than 12 months. Note that Representation Companies and Organizations will not have a VAT Registration Certificate. You must verify the amount applied for with original invoices. Swedish VAT is to be specified in the invoice. Your application must show the following separately: VAT on fees for passage over the Öresund Link. VAT applying to reversed charge. Other VAT. Minimum Amounts If the application refers to a full calendar year or the remainder of the year until the turn of the year, the VAT is refunded if it amounts to at least SEK 250. In other cases, the VAT is refunded if it amounts to at least SEK 2,000. APS VAT Refund Administration Service APS can provide Swedish VAT refund services for your organization. Please contact your account representative for further information. When a foreign entrepreneur sells goods or performs services in Sweden, it is normally the purchaser who is liable to pay VAT if this purchaser is VAT-registered in Sweden (reverse tax liability). You do not therefore, as a rule, have to be registered for VAT in Sweden if all your customers are VAT-registered. How is VAT reported in the case of reverse tax liability? For sales where you have applied reverse tax liability you should neither state the VAT nor the turnover in your VAT and PAYE return. It is the purchaser who must report the VAT. Foreign Entrepreneurs without VAT Registration Your organization should consider this option if you are an EU or non-EU registered organization and will only be dealing with VAT-registered organizations and/or government entities in Sweden. Companies that are registered as a Representative Office (also called Liaison Office) that are not VAT registered with the Swedish Tax Authority file for VAT (MOMS) refunds separately from their monthly tax declaration. APS can provide this service for your organization on a quarterly or annual basis. Foreign Entrepreneurs with VAT Registration Your organization must use this option if you will be engaging in activities in which VAT is required. Your organization can also choose to take this option voluntarily. You are obliged to be represented by an agent if you are not permanently established or resident within the EC or in a country with which Sweden has an agreement on mutual assistance in collection of taxes and exchange of information on taxes. Sweden has such an agreement with the Nordic countries. If you are not obliged to have an agent you nevertheless have the right to be represented by an agent. An agent must be approved by the Swedish Tax Agency. In accordance with your power of attorney, the agent is accountable for the VAT and PAYE returns and has the right to sign your VAT and PAYE returns on your behalf. The agent will also represent you with regard to questions concerning VAT. You can download a power of attorney form (SKV 5703) from www.skatteverket.se. APS can serve as your Swedish agent and will process your VAT as part of the monthly tax declaration process. Organization Number and VAT Number on Invoices There are specific regulations in Sweden regarding the placement of your Swedish Organization Number and VAT Number (if applicable) on all of your invoices. APS Can provide assistance in helping your company comply with Swedish regulations concerning invoices and contracts.