The voluntary VAT turnover limit will be raised from SEK 30,000 to SEK 80,000 from 1 July 2022. This is proposed by the government in Government Bill 21/22:110.
High turnover threshold
The proposal means that companies with a turnover of no more than SEK 80,000 will not need to be registered for value-added tax. The purpose of the proposal is to simplify things for business owners engaged in smaller operations.
Terms and Conditions
The posters included in the turnover are as follows:
- Taxable turnover within Sweden
- Export
- International sales
- Property transactions
- Financial transactions
- Insurance services
When assessing the turnover threshold, the turnover of fixed assets shall not be included.
Import m.m.
Exemption from value added tax only refers to self-turnover. For imports and other acquisitions where the buyer is liable for VAT, turnover is not calculated. This means that even if a taxable person is exempt from value added tax, this person is obliged to report and declare VAT on imports and reverse charge.
Decision request
For businesses already registered for VAT but wishing to de-register, an application must be submitted to the Swedish Tax Agency. This does not apply to taxable persons who are not registered for VAT.
Exceeding limit
If turnover exceeds DKK 80,000 in the current year, the taxable person must charge VAT from the turnover that results in exceeding the turnover threshold. It should be noted that the VAT exemption ceases without any decision and applies immediately when the turnover threshold is exceeded. If this occurs, notification of VAT registration must be made to the Swedish Tax Agency.
No right to deduct input VAT
For taxable persons who choose to apply the voluntary VAT exemption, they are also not entitled to deduct input VAT.
Exception
The possibility of VAT exemption does not apply to the following:
- Taxable persons established outside of Sweden
- Artists who are voluntarily VAT registered
- A person who is voluntarily liable for VAT on the turnover of certain property lettings or investment gold
- Intra-EU trade in new means of transport
- Withdrawal of goods for staff or personal use
Law of inertia
To prevent switching between taxable and exempt turnover, there is an inertia rule. The rule means that previously exempt activities that have subsequently applied for tax liability can only revert to exempt activities at the beginning of the third tax year after the year in which the decision on tax liability was made.
Entry into force
The increased turnover limit is proposed to take effect on 1 July 2022.
Previous provisions shall continue to apply to VAT where the tax liability has arisen before the entry into force.
Source: Government Bill 2021/22:110 / The Riksdag
