Purchasing services from non-EU countries
Special rules apply when you purchase a service for your business from a non-EU country. In most cases, the seller should not charge you VAT on the sale. You report Swedish VAT on the purchase in your VAT return instead.
Here are some examples of the most common scenarios – and the most important things to consider – when purchasing services for your business from non-EU countries.
Here’s how to determine whether you need to report Swedish VAT on a purchase
To determine whether you need to calculate and report Swedish VAT on a purchase you have made, you need to consider the following:
- whether you are making the purchase as a taxable person (such as a business) or a non-taxable person (such as a private individual)
- the type of service you are purchasing.
The rules vary depending on whether you purchase a service for business or private use
When you purchase a service from a non-EU country, the VAT rules vary depending on whether you make the purchase as a taxable person (such as a business or association), or as a non-taxable person (such as a private individual) for private use.
Taxable persons
In most cases, the term “taxable person” refers to a business. When it comes to services, the term "taxable person" includes any party that carries out an economic activity on an independent basis, regardless of whether this activity is subject to VAT. (If you sell goods or services more often than on an occasional basis, you are carrying out an economic activity.)
Dental practices, for example, normally carry out VAT-exempt business activities, but they are still considered to be taxable persons. The same applies to businesses that are not required to pay VAT due to their country’s exemption rules for small businesses.
When purchasing services from other countries, all VAT-registered legal entities are also considered to be taxable persons – regardless of whether they carry out economic activities. Examples of legal entities include limited companies, associations, foundations, government agencies and municipalities.
As a general rule, when you purchase a service as a taxable person, VAT is payable in the country in which you conduct business. If you run a business in Sweden and you purchase a service from a provider in another country, you are normally required to calculate the VAT payable on the service and report this amount in your Swedish VAT return.
Non-taxable persons
In most cases, the term “non-taxable person” refers to a private individual. However, it can also be used for a taxable person, such a business, that purchases a service for private or non-business use.
Taxable person: determening the place of taxation (Legal guidance in Swedish) External link.
Here's what constitutes an economic activity (Legal guidance in Swedish) External link.
The service type determines the country in which VAT is payable
The type of service you purchase determines the country of sale and place of taxation. The general rule applies to most services, but there are some exceptions to which special rules apply.
Exception– the seller must report the VAT on certain services
General rule: as a buyer, you must report VAT on your business purchases
Most services purchased from a non-EU country by a taxable person, such as a business, are subject to VAT in the country in which the services are considered to have been sold. This is the general rule.
Purchasing services as a taxable person
When you purchase services for your business as a taxable person, these services are considered to have been sold in the country in which your business is established. As the buyer, you must calculate and report Swedish VAT on such purchases in your VAT return.
Purchasing services for private use
If you buy a service for private use only, you make the purchase as a private individual (a non-taxable person). In such cases, the seller must charge VAT at the rate applicable in their country and report the VAT amount there.
Here’s how to report purchases of services from non-EU countries
You must report the VAT on your purchases if the following requirements are met:
- you buy the services from a taxable person (such as a business) in a non-EU country
- you make the purchases as a taxable person – for example, as a business owner buying services for your business
- the services are covered by the general rule and are subject to VAT in Sweden.
You enter the VAT basis (the amount in SEK that you paid for the service) in box 22. If you paid for the service in another currency, you must convert the amount to Swedish kronor.
Currency conversion (in Swedish)
Currency conversion (Legal guidance in Swedish) External link.
You calculate Swedish output VAT from the VAT basis and enter this amount in box 22. You then report the VAT in box 30, 31 or 32 as appropriate, depending on the VAT rate that applies to the service you have purchased. The VAT rate that applies to most services is 25%.
If the purchase is made for your VAT-liable business, you are normally entitled to claim a deduction for the output VAT you reported in box 30, 31 or 32. You claim this deduction by entering this amount as input VAT in box 48. However, if you are only registered for VAT so that you can report output VAT on purchases from other countries, you are not permitted to claim a deduction as input VAT.
If you are not registered for VAT
A taxable person, such as a business, must be registered for VAT if it purchases services for business use from a non-EU country. This is because a taxable person must be able to report Swedish VAT on these purchases in a VAT return – regardless of whether it carries out VAT-liable business activities.
However, you do not need to register for VAT if you only purchase services listed under the heading “Exception – the seller must report the VAT on certain services”.
Example: purchasing services from non-EU countries without being registered for VAT
Peter runs a dental practice in Sweden and purchases a consultancy service from a seller in a non-EU country. Peter only sells dental services, which are VAT exempt, so his business is not registered for VAT. The consultancy service that he buys is not VAT exempt. It is therefore covered by the main rule. Since Peter’s business is a taxable person with operations in Sweden, the service is considered to have been sold in Sweden, and VAT must be charged on it here.
Peter must therefore:
- register his business for VAT
- report the purchase in Sweden by calculating the output VAT on it, and entering this amount in his business's VAT return.
He is not permitted to claim an input VAT deduction, since the purchase is not made for a VAT-liable business activity.
Some services are not covered by the main rule. Special rules apply to these instead. If a taxable person purchases such a service from a non-EU country, the sale is considered to have been made in Sweden. The seller must therefore register for VAT in Sweden in order to be able charge VAT on the sale and report it here.
Passenger transport services
If a passenger transport service is carried out and completed within Sweden, it is considered to have been sold here. VAT must also be charged on it in Sweden.
In the case of a passenger transport service between Sweden and another country, the sale is considered to have been made in the other country. VAT must also be charged in that country. The same rules apply to luggage services associated with passenger transport and, for example, the ferry transport of a bus carrying passengers.
Admission to events such as concerts, sporting events and trade fairs
The sale of admission to an event (entry fee) is always considered to have been made in the country in which the event takes place. The VAT must also be charged in that country.
This applies to admission to the following types of events:
- cultural
- artistic
- sporting
- scientific
- educational
- entertainment-related or similar.
Examples include admission to:
- trade fairs and exhibitions
- theatre productions
- circuses
- amusement parks
- concerts
- sports matches and competitions
- educational and scientific events, such as conferences and seminars.
The same rules apply to service fees related to admission, such as cloakroom and toilet charges.
Restaurant and catering services
The sale of a restaurant or catering service is considered to have been made in the country in which the service is physically performed.
For a service to be regarded as a restaurant or catering service, it must include not only the provision food and drink, but also various services directly connected to this provision. Examples of such services include table setting, serving, clearing, dishwashing and the right to use specific premises furnished with tables and chairs.
If a restaurant or catering service is provided on board a ship or aircraft in international traffic, the sale is considered to have been made outside Sweden.
Short-term rental of means of transport (such as cars)
The sale of rental of a means of transport is considered to have been made in the country in which the customer collects the vehicle. VAT must also be charged in that country.
Examples of means of transport:
- cars, buses and tractors
- trailers and semi-trailers
- motorcycles
- bicycles
- ships
- aircraft (such as aeroplanes or helicopters)
Rental of a means of transport is considered short-term up to a maximum period of 30 days. For ships, the maximum rental period is 90 days.
If the rental period exceeds 30 days – or 90 days for a ship – this constitutes a long-term rental. The general rule applies to long-term rentals to businesses. This means that if you purchase a service for your business as a taxable person, the service is considered to have been sold in the country in which you established your business. In such cases, as the buyer, you must calculate and report Swedish VAT on your purchase.
Real estate services: VAT-registered buyers must report the VAT
Sales of real estate services are considered to have been made in the country in which the property in question is located. VAT must also be charged in that country.
Real estate services include:
- construction and building work
- cleaning of premises
- rental of rooms in hotel operations
- real-estate brokerage
If you are registered for VAT and buy services related to a property located in Sweden, you are normally required to calculate and report the VAT on your purchases. The seller can also choose to register for VAT in Sweden and can request to calculate and report the VAT on sales of real estate services.
Here’s how to report real-estate services that you purchase exclusive of VAT
If you are registered for VAT and purchase real-estate services from a non-EU country, which are subject to VAT in Sweden, you are normally required to report the VAT on your purchases in your Swedish VAT return.
- Enter the VAT basis (the amount you paid) in box 24
- Calculate Swedish output VAT on this amount in box 24, and enter the VAT in box 30, 31 or 32 as appropriate,
depending on the VAT rate that applies to the service you purchased. For most services, the VAT rate is 25%.
If the purchase is for your VAT-liable business, you are normally entitled to claim a deduction for the output VAT you reported in box 30, 31 or 32. You claim this deduction by entering this amount as input VAT in box 48.
Purchasing real estate services if you are not registered for VAT
If you are not registered for VAT and purchase real estate services for your business, the seller must charge and report the VAT on them. This rule applies provided that the property in question is in Sweden.
Example: purchasing real-estate services if you are not registered for VAT
A Norwegian building company renovates Erika’s dental clinic in Sweden. Erika’s business only sells VAT-exempt dental services and is therefore not registered for VAT. The sale of the renovation services is considered to have been made in Sweden, since the dental clinic’s premises are located here. The Norwegian building company must register for VAT in Sweden and charge Swedish VAT on its services. Erika purchased the services for her VAT-exempt business and is therefore not entitled to claim an input VAT deduction.