Purchasing goods from other EU countries
Special rules apply when you purchase goods for your business that are transported from a VAT-registered seller in another EU country. Normally, the seller should not charge you VAT on the sale. You must report Swedish VAT on your purchase instead.
Here are some examples of the most common scenarios – and the most important things for you to consider – when purchasing goods from other EU countries. Normally, the seller should not charge you VAT on the sale. As the buyer, you must report Swedish VAT on the purchase in your VAT return.
Requirements for making VAT-exclusive purchases of goods within the EU
If you purchase goods without VAT from another EU country, you must report Swedish output VAT on the purchase in your VAT return. In order for you to make VAT-exclusive purchases of goods from businesses in other EU countries, the following requirements must be fulfilled:
- The seller must be registered for VAT in another EU country.
- The goods must be transported from one EU country to another.
- You must provide details of your valid VAT number to the seller.
What is a VAT number?
VAT stands for Value Added Tax. If you are registered for VAT in Sweden, you will have a valid VAT number. Your international VAT number is based on your Swedish VAT registration number.
However, it starts with the country code SE, and ends with the digits 01. If you are a sole trader, the country code is followed by your 10-digit personal identity number. In the case of a company or an association, the country code is followed by its 10-digit corporate identity number. A VAT number is written without a hyphen.
Example of a VAT number
Anna’s company is registered for VAT in Sweden, and its corporate identity number is 999999-9999. The company’s VAT number is therefore SE999999999901.
It may be useful to know that this type of VAT-exclusive purchase from a VAT-registered seller in another EU country is also known as intra-EU acquisition of goods. The corresponding transaction made by the seller is sometimes referred to as intra-EU supply of goods.
Here’s what to do if a seller is not registered for VAT
Do not calculate and report Swedish output VAT if you purchase goods from a seller in another EU country that is not registered for VAT. This rule applies if the seller is a private individual, for example.
If you resell goods that you purchased from a seller that is not registered for VAT, you are still normally required to charge VAT on the sale and report it in your VAT return. In the case of used goods, you might be eligible to apply the VAT margin scheme for second-hand goods in some cases.
Here’s how to report VAT-exclusive purchases of goods within the EU
When you purchase VAT-exclusive goods from a VAT-registered seller in another EU country, you must report the purchase in your Swedish VAT return.
If you paid for the goods in another currency, you must convert the amount to Swedish kronor.
Currency conversion (Legal Guidance in Swedish) External link.
You enter the VAT basis (i.e. the amount you paid for the goods) in box 20. When calculating the VAT basis, you must include any indirect costs that the seller has charged for the goods – for example, for transport and packaging.
You calculate Swedish output VAT using the VAT basis, and enter the amount in box 20. You then report the VAT in box 30, 31 or 32 as appropriate, depending on the VAT rate that applies to the goods you purchased. For most goods, the VAT rate is 25%.
If you made the purchase 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 the 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 EU countries, you are not entitled to deduct the amount as input VAT.
Example: how to report the purchase of goods from another EU country
Adam's Swedish business purchases a machine from Ivana's business in Slovenia. The purchase price is EUR 5,000 including delivery. Adam and Ivana are registered for VAT in their respective countries. Adam will use the machine in his VAT-liable business, and he provides his valid VAT number when he places his order. The machine will be transported from Slovenia to Sweden.
Since Adam has provided details of his valid VAT number, Ivana does not charge him VAT on this sale. Adam must calculate the VAT on this purchase himself, and report it in his Swedish VAT return.
First, he converts the amount stated in the invoice from euros to Swedish kronor. On the date in question, EUR 5,000 is equivalent to SEK 55,000. He then calculates the output VAT on the purchase. The Swedish VAT rate on the machine is 25%, so the VAT payable is SEK 13,750 (25% of SEK 55,000). Since Adam will use the machine in his VAT-liable business, he is also entitled to claim a deduction for input VAT. He can claim the same amount as the VAT he calculated.
This is how Adam reports the purchase in his VAT return:
- He enters the purchase amount he paid (SEK 55,000) in box 20.
- He enters the output VAT at 25% (SEK 13,750) in box 30.
- He enters the input VAT (SEK 13,750) in box 48.
Here’s what to do if a seller has incorrectly charged you VAT in another EU country
If the requirements for a VAT-exempt purchase of goods from another EU country have been fulfilled – but the seller has incorrectly charged VAT in another EU country – you must still calculate and report Swedish VAT on the purchase in your VAT return. You calculate the VAT based on the price of the goods, including the foreign VAT.
If you have purchased the goods for your VAT-liable business, you are normally entitled to claim an input VAT deduction for the VAT that you have calculated. However, you are not entitled to claim a deduction for the foreign VAT that the seller has charged you.
To avoid paying VAT on goods in both Sweden and the other EU country, you need to ask the seller to send you a corrective invoice (such as a credit invoice) to amend the incorrectly charged VAT amount. Alternatively, the seller can credit the invoice in full and then issue a new invoice to you.
Example: how to report purchases of goods if the seller has incorrectly charged you VAT in another EU country
Ella buys shoes for her Swedish business from a VAT-registered company in Italy. The requirements have been met for a VAT-exempt purchase, but Ella forgets to provide her VAT number. The seller therefore charges VAT on the goods in Italy. Ella is obliged to pay a total of EUR 10,000, including Italian VAT.
Even though Ella has paid VAT to the seller in Italy, she is also obliged to calculate Swedish VAT on the purchase and report it in her Swedish VAT return.
First, she needs to convert the invoiced amount – inclusive of Italian VAT – from euros to Swedish kronor. On the date in question, EUR 10,000 is equivalent to SEK 110,000. She then calculates the output VAT on the purchase. The Swedish VAT rate on shoes is 25%, so the VAT amounts to SEK 27,500 (25% of SEK 110,000). Since Ella will use the goods for VAT-liable business purposes, she is also entitled to claim an input VAT deduction for the VAT amount that she has calculated.
However, Ella is not entitled to claim a deduction in her VAT return for the Italian VAT that the seller charged her.
Here’s how Ella reports the purchase in her VAT return
- She enters the purchase amount (SEK 110,000) in box 20.
- She enters the input VAT (SEK 27,500) in box 30.
- She enters the input VAT (SEK 27,500) in box 48.
Triangulation: here’s how to report the purchase of goods within the EU
Triangulation is a three-party supply chain transaction, whereby three different businesses in the EU are involved in the two-step sale of goods. In certain circumstances, you must not report output VAT on goods you purchase through a triangulation transaction.
This is when you have report purchases of goods from another EU country
The date on which the goods are delivered and the date on which the seller issues the invoice determine when you have to report each purchase of goods you make from another EU country.
- If the seller issues the invoice during the same month in which the goods are delivered, you must report the purchase in your VAT return for the reporting period that includes the month of delivery.
- If the seller waits longer to issue the invoice, you must report the purchase in the VAT return that covers the calendar month following the month of delivery.
- If the seller issues the invoice in advance (i.e. before the goods are delivered), you must enter the purchase in the VAT return for the reporting period that covers the month of delivery.
Examples: the correct periods in which to report goods purchases
Adam's company in Sweden purchases a machine from Ivana's company in Slovenia. Adam and Ivana are registered for VAT in their respective countries. Adam will use the machine for VAT-liable business purposes, and provides details of his valid VAT number when he places the order. The machine is transported to from Slovenia to Sweden in March. Ivana does not charge VAT on the sale.
Adam reports VAT on a quarterly basis (once every third calendar month).
Invoicing and delivery take place during the same month
The machine is delivered to Adam in Sweden on 11 March, and Ivana issues the invoice on 17 March. In this case, the invoice is issued during the same month in which the goods are delivered – i.e. in March. This means that Adam must report the purchase in his VAT return for the January-March period.
Invoice issued later
The machine is delivered to Adam in Sweden on 11 March, but Ivana doesn't issue the invoice until 17 May. Since Ivana issues the invoice too late, Adam must report the purchase during the period that includes the 15th day of the month following the month of delivery (i.e. April). Adam therefore reports the purchase in his VAT return for the April-June period .
Advance invoicing before goods are delivered
Ivana issues the invoice on 17 March, and the machine is delivered to Adam in Sweden on 14 May. When an invoice is issued in advance, the reporting period is determined by the date of delivery. Since the goods are delivered in May, Adam must report the transaction in his VAT return for the April-June period.