The Tax Agency issues a statement on the ongoing question of VAT on printing services

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PwC-skatteradgivning-Percent-3-solid_0002_burgundyThe Tax Agency provides clarification in a new guidance stating that buyers of printed products will not be hit by any VAT costs due to the much debated VAT issue regarding printed products. At the same time the Agency places a high requirement on the buyers to actively undertake legal measures to reclaim the incorrectly debited VAT from the printing companies.

The Supreme Administrative Court (HFD) has previously determined that buyers of printed products should, in principle, be indemnified. According to HFD, buyers should, on the first hand, request the printing company for repayment. Should it prove to be impossible or unreasonably difficult for the buyer to receive payment from the printing company, then the buyer has the right, according to HFD, to claim compensation from the Tax Agency.

In December 2015, the Supreme Court (HD) determined that the buyers of printed products have the contractual possibility to demand compensation from their printing companies for the incorrectly charged VAT, see previous blog post. The Tax Agency is of the opinion that HD’s decision is precedential in all printing VAT cases and will, therefore, begin to revoke those payment respites previously granted to the printing companies’ customers due to the uncertain legal situation.

According to the Tax Agency, there is the possibility for buyers of printed products to apply for a new payment respite, for example, when the printing company has gone into bankruptcy.

The buyers, who should not risk being hit by a final cost must, according to the Tax Agency, actively take legal measures vis á vis the printing companies to receive repayment of any incorrectly charged VAT and cost interest. Those buyers who, in spite of active measures, do not receive payment due to the printing company’s proven payment incapacity have, under certain premises, the possibility to have the consequential amendment reconsidered by the Tax Agency. However, a buyer who has not exhausted the legal possibilities in place to obtain payment can, according to the Tax Agency, neither count on any change in the consequential amendment nor on any change in the status of the payment respite.

Comments

We welcome the fact that the Tax Agency has now confirmed that the buyers of printed products will not be impacted by any VAT costs in the case the buyer cannot receive repayment from the printing company. However, the Tax Agency places major requirements on the buyers to actively re-claim the incorrectly debited VAT from the printing company.

The customers of printing companies who have gone into bankruptcy, should, already at this point in time, consider requesting continued respite with payment until the bankruptcy in question is completed and there is a determination of the amount to be distributed by the liquidator to the customer. First then, can the Tax Agency reconsider the consequential amendment. According to our understanding, the buyers who previously have not requested respite but who have paid in the VAT to the Tax Agency, could now also request respite as regards payment. A premise here is, however, that the customer monitors its claim in the bankruptcy proceedings.

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

Henrik Ivarsson

Henrik Ivarsson

Henrik Ivarsson arbetar med momsfrågor på PwC:s kontor i Kristianstad.
010-212 85 25
Henrik Ivarsson works with Value Added Taxes at PwC's Kristianstad office.
+46 10 212 85 25

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