If you are running an e-commerce business or planning to conduct business in Sweden, you may need to understand tax matters.
Sweden, as a member of the European Union, currently uses the Swedish Krona (SEK) and welcomes more businesses to establish a presence.
It’s worth noting that Sweden’s current value-added tax (VAT) thresholds and reporting are based on Swedish Kronor.
VAT Registration in Sweden
Sweden has friendly and stringent tax regulations for foreign businesses, so it’s important to delve into more details.
Non-Swedish companies can engage in business activities in Sweden without having a branch in the country and are treated as non-residents.
In Sweden, non-resident traders do not have a VAT registration threshold as they are required to register for VAT immediately.
It’s important to note that non-European Union companies may need to appoint a local fiscal representative in certain situations.
When is VAT Registration Required?
Apart from conducting local business activities in Sweden, there are some other situations when VAT registration is required:
- Storing goods in warehouses in Sweden.
- Engaging in import and export trade in Sweden.
- Remote sales to Swedish customers (B2C) from other European Union countries.
The registration duration varies for different businesses, typically taking around 4 weeks or longer.
VAT Compliance
Once you start doing business in Sweden, you need to be aware of the following aspects:
- Complying with Swedish invoice requirements.
- Timing for issuing point-of-sale tax invoices.
- Foreign currency reporting.
- Maintaining accounting records.
- Correcting issues in VAT refund claims.
VAT Rates in Sweden
Standard rate – 25%: Applicable to most transactions.
Reduced rates – 12%/6%: Applied to some food items, accommodation, books, newspapers, and some services.
Zero rate – 0%: Applicable to healthcare, financial services, and educational services.
VAT Returns
Once your company has a Swedish VAT number, you will also need to submit regular VAT returns.
The frequency of VAT reporting typically depends on your company’s annual turnover:
- Annually: Turnover below 1 million Swedish Kronor.
- Quarterly: Turnover between 1 million and 40 million Swedish Kronor.
- Monthly: Turnover above 40 million Swedish Kronor.
