Vat rates in Sweden

There are currently four rates of VAT in Sweden. The standard rate of VAT is 25%, while the reduced rates are: 12%, 6% i 0%. The reduced VAT rates apply as follows:

• 12% – selected food products, non-alcoholic beverages, hotel accommodation, restaurant services, and takeaway meals, e-books, and certain works of art or collector’s items
• 6% – books (also some e-books), newspapers, magazines, tickets for some sports and cultural events, domestic passenger transport, use of sports facilities
• 0% – prescription drugs, printing services (including for non-profit organizations), intra-Community and international passenger transport

For all goods or services to which the reduced VAT rate does not apply, the standard rate must be applied. As mentioned, this is currently 25%.

When to register for VAT in Sweden?

The VAT registration in Sweden is completed with a VAT number that consists of 14 characters – the prefix “SE” and 12 digits. The registration for VAT is preceded by the number. According to the current legislation, the obligation to register arises when the foreign entity exceeds the threshold for distance selling, which is set at EUR 34,000 per year.

Similar to other countries, entrepreneurs in Sweden submit VAT returns. The frequency of their filing depends on the amount of annual income. Monthly declarations are obligatory for companies with a turnover of more than SEK 40 million. Annual turnover between SEK 1 and SEK 40 million means that quarterly VAT returns must be submitted. Companies with an annual turnover of less than SEK 1 million submit the required documents only once a year.

How should a Swedish VAT invoice be issued?

Being registered for VAT means that you need to know how a correctly issued VAT invoice should look like. According to Swedish law, the document should include information about:

• the customer and supplier – the customer’s name and address must be stated, and in the case of the supplier, the VAT number is required
• The goods or services supplied, which must be described on the invoice, as well as details of the quantity and date of delivery.
• The price, the VAT amount, and the VAT rate applied – the VAT amount should be stated in SEK and additional details are necessary if there is no VAT.

In addition to the total gross amount, the invoice must also contain technical details such as the date of issue and a unique invoice number. Invoices are the basis for VAT settlements. The Swedish tax authorities impose severe penalties on businesses that incorrectly account for VAT. In addition to an interest of 15%, there is also a financial penalty for submitting an incorrect or inaccurate VAT return – the penalty is 20% of the incorrectly reported VAT.

In addition to the VAT return, foreign companies operating in Sweden may be required to file an Intrastat statistical report. This includes information on imports and exports of goods between countries in the European Community and on the movement of own goods to a warehouse in another member state.

More information, visit the website: https://europe-tax.com/