SWEDEN – Update 29th June
The Swedish Tax Agency has published a new guideline with the purpose to facilitate companies’ VAT treatment of bad debts. We explain what this means.
In the ongoing pandemic, many companies suffer from economic losses due to a massive decline in sales. In addition, more and more companies are having difficulties paying their invoices, which means that many suppliers will face bad debts. Normally suppliers must meet high standards in order to reduce previously reported VAT on bad debts. For instance, the supplier must prove that the buyer has no ability to pay. In short, the new guideline means that it, under certain circumstances – due to covid-19 – can be assumed that the buyer has no ability to pay.
According to the Swedish Tax Agency, it can be assumed that the buyer has no ability to pay a debt, if the following conditions are met:
If all of the requirements are fulfilled the supplier is allowed to lower the taxable amount and reduce the previously reported output VAT on the supply. Also, when a receivable qualifies as a bad debt, the supplier does not have to issue a credit note to the buyer.
Should the supplier receive payment at a later stage, partly or in full, output VAT must be reported for the incoming payment.
Source Credit – pwc Sweden
SWEDEN – Update 24th June
The Swedish Tax Agency has published a new guideline with the purpose to facilitate companies’ VAT treatment of bad debts. We explain what this means.
In the ongoing pandemic, many companies suffer from economic losses due to a massive decline in sales. In addition, more and more companies are having difficulties paying their invoices, which means that many suppliers will face bad debts. Normally suppliers must meet high standards in order to reduce previously reported VAT on bad debts. For instance, the supplier must prove that the buyer has no ability to pay. In short, the new guideline means that it, under certain circumstances – due to covid-19 – can be assumed that the buyer has no ability to pay.
According to the Swedish Tax Agency, it can be assumed that the buyer has no ability to pay a debt, if the following conditions are met:
1. the buyer is a legal or natural person independently carrying on economic activity
2. the invoice is issued 1 February 2020 – 31 December 2020
3. the invoice is at least three months overdue
4. a written reminder letter has been sent
5. the seller and the buyer are not associated enterprises.
If all of the requirements are fulfilled the supplier is allowed to lower the taxable amount and reduce the previously reported output VAT on the supply. Also, when a receivable qualifies as a bad debt, the supplier does not have to issue a credit note to the buyer.
Should the supplier receive payment at a later stage, partly or in full, output VAT must be reported for the incoming payment.
Source Credit – pwc
SWEDEN – Update 28th April
The Swedish parliament is considering a draft bill for the 2020 Spring Budget, which was presented on 15 April 2020. The bill primarily includes measures to fund efforts to combat the COVID-19 pandemic and provide relief and support the economy. One of the relief measures includes deferral by up to one year for the remittance of VAT for taxpayers that remit VAT on an annual basis.
Source Credit – Orbitax
SWEDEN – Update 17th April
The Government will take measures to support financially affected businesses with late penalty and interest fine easements on VAT payments for up to one year. The new rules apply from 7th April 2020, but can be applied retroactively from 1st January 2020.
Source Credit – Accordance VAT
SWEDEN – Update 9th April
Businesses below SEK 3million annual turnover may switch to VAT cash scheme. Small companies below SEK 1million can apply for extending VAT reporting period.
Update 30 March – timings of proposals below are now confirmed as coming into force on 30 March 2020.
Sweden has become the latest country to introduce Value Added Tax easement measurers to help businesses cope with the economic downturn of the Covid-19 crisis.
As part of a kr 300 billion (Swedish Crown) support package, companies may delay VAT payments and other tax settlements for up to 12 months. The measure will be backdated to January 2020, can last until September 2020 for quarterly VAT reporters. For annual VAT payers, the measure is introduced between 27 December 2019 and 17 January 2021.
There will also be a range of loan packages, salary support and direct measures for the airline industry.
Source Credit – Richard Asquith (Avalara)
SWEDEN – Update 8th April
The Swedish Tax Agency has announced that companies may have the opportunity to change their VAT account due to the corona crisis. This means that companies can change their accounting method or accounting period to temporarily strengthen their liquidity.
Source Credit – PWC
SWEDEN – Update 31st March
Source Link here
SWEDEN – Update 31st March
Source Link here
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