Proposed threshold on net sales for VAT registration

PwC-skatteradgivning-Percent-3-solid_0005_orange.png ‹ Back to the articles

PwC-skatteradgivning-Percent-3-solid_0005_orange.pngThe Tax Agency has proposed a threshold of net sales less than SEK 30,000. This proposal implies that companies with this limited amount of sales do not need to register or report output or input VAT.

Today, an entity undertaking VAT-liable operations is obliged to be registered for VAT and to report VAT from the first krona. This implies that businesses with a limited amount of net sales are obliged to register for VAT and are to report VAT on their sales. For this group of businesses and for the Tax Agency, this creates a mandatory, major administrative burden, and in many other countries there are thresholds in place placing a limit on when smaller companies are obliged to register and report VAT. The Tax Agency has now proposed, in a memorandum, that such a threshold on net sales also be introduced in Sweden. The Tax Agency has proposed a tax exemption for operations with net sales less than SEK 30,000.

For an entity which is not already registered for VAT, this exemption applies without application or a decision being issued by the Tax Agency. An entity which is currently registered for VAT and which meets the premises for the exemption must send in an application on tax exemption to the Tax Agency who will take a decision on the case. Exemption is to be granted if net sales during one of the most recent two years has not been in excess of SEK 30,000 and also when net sales will not exceed this limit in the current year. The entity who has received a decision on exemption does not need to charge VAT on its sales but neither does it have the right of deduction of VAT on costs incurred in the operations. The proposal is intended to come into effect on 1 January 2017.

If the proposal is implemented, this will imply that operations having only a very limited VAT-liable amount of net sales, for example, those providing electricity from own owned solar energy plants, can be exempt from VAT. Both the taxpayer and the Tax Agency will, in this manner, avoid the administration involved in VAT registration and VAT reporting. The proposal has been sent for consultation and the consultation parties are to have presented their statements on no later than 13 May 2016.

Do you have any questions on Value Added Taxes, customs and excise duties?

Christina Grape

Christina Grape

Christina Grape arbetar på PwC:s kontor i Stockholm med momsrådgivning och är specialiserad på frågor avseende fastighetsmoms.
010-212 54 93
Christina Grape works at PwC’s Stockholm office, providing VAT advisory services, and specialises in issues relating to VAT on property.
+46 10 212 54 93

Leave a comment

Related articles

Read the article

New information due to covid-19 regarding VAT treatment of bad debts

The Swedish Tax Agency has published a new guideline with the purpose to facilitate companies’ VAT treatment of bad debts. We explain what ...

Read the article
Read the article

Exemption from customs duties and VAT on imports: an effect of Covid-19

When importing goods from non-EU countries, customs should be cleared and customs duties and VAT should be paid. As a result of the ...

Read the article
Read the article

VAT reporting during the Corona crisis

The Swedish Tax Agency has announced that a company, due to the Corona crisis, may have an opportunity to change how it reports VAT. This ...

Read the article