New VAT act

by Ebba Perman Borg, Victor Elovsson and Maria Ström


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On 17 January 2023, the Swedish Ministry of Finance published its proposal for a new VAT Act (prop. 2022/23:46). The proposed new VAT Act constitutes a revision of the old VAT Act currently in force, the purpose of which is to make the VAT rules easier to interpret and apply. The new VAT Act is adapted to follow the VAT Directive with respect to structure, terms used, and systematics.

Due to a number of changes since first incorporated, the VAT Act has become difficult to apply and oversee. The proposed revision of the current VAT Act, therefore, will include a new structure and defined terms which are more aligned with the VAT Directive. In short, the proposal focuses mainly on a formal revision of the act, avoiding material changes as far as possible.

The current VAT Act has been criticised for differing from the VAT Directive in terms of its structure, terms used, and systematics, which may lead to uncertainty regarding the applicable law. Due to time constraints, however, the proposal does not include any adaptations to the exemptions from VAT liability in the VAT Directive, such as the exemption for financial services, etc.

Although the proposed amendments are mainly formal, it can be noted that the proposal suggests a change to the VAT treatment of the supply of services within groups of persons, who are carrying on activities which are exempt from VAT. The exemption is proposed to be adapted in accordance with the VAT Directive, making it possible for such persons to apply the exemption to the full extent according to the VAT Directive.

The proposal is currently being processed in the Swedish Parliament and is expected to be voted for on 20 April 2023. The new act is proposed to enter into force and apply as of 1 July 2023.

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