Selling services to countries outside the EU
When you sell services to buyers from countries outside the EU, in most cases different rules apply depending on whether you sell to a taxable or non-taxable person.
If you sell a service to a taxable person (such as a business), there are some circumstances in which you must not charge VAT on the sale. If you sell a service to a non-taxable person (such as a private individual), you must generally charge Swedish VAT on the sale.
Here are some examples of the most common scenarios, and the most important things for you to consider when selling services to buyers in non-EU countries.
Please follow the steps below to determine whether or not you should charge VAT on your services, and how to report your sales.
Here’s how to determine whether you’re required to charge Swedish VAT
In order to determine whether a service is subject to VAT in Sweden or in another country, you need to consider the following:
- Is the buyer a taxable person (such as a business) or a non-taxable person (such as a private individual)?
- What kind of service is it?
Find out who the buyer is
First, you must determine whether or not you are selling to a taxable person. A taxable person is normally a business. With regard to services, the term “taxable person” includes any party that carries out an economic activity independently, regardless of whether or not the activity is subject to VAT. If goods or services are sold on anything more than an occasional basis, this constitutes an economic activity. If goods or services are sold on an occasional basis only, this is not 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 because of their country’s exemption rules for small-business owners.
All legal entities (for example, limited companies, associations, foundations, government agencies and municipalities) that are registered for VAT also constitute taxable persons when they purchase services. This applies regardless of whether or not they carry out economic activities.
In most cases, the term “non-taxable person” refers to a private individual. However, it can also be used for a taxable person that makes a purchase for private use.
- Here's what constitutes a taxable person (Legal guidance in Swedish) External link.
- Here's what constitutes an economic activity (Legal guidance in Swedish) External link.
As the seller, you must be able to provide proof that the buyer is a taxable person established in a non-EU country. This could be one of the following, for example:
- A document stating that the buyer is registered for VAT in a non-EU country.
- Another business registration document issued in the country in which the buyer is established, stating that the buyer is a taxable person.
- A printout of a webpage – for example, from the buyer’s website – showing that the buyer is a taxable person established in a non-EU country.
The service type determines which rules apply
The requirement to follow one of the general rules, or take into account any of the applicable exemptions, is determined on the basis of the type of service you have sold. This determines where your service is provided, and the country in which VAT is payable.
There are two general rules that apply to where your service is provided, and where VAT is payable. One rule applies to service sales to taxable persons (such as businesses), and the other applies to non-taxable persons (private individuals, for example).
Some types of services are exempt from the general rules. There are also some types of services that are considered to be provided abroad, regardless of the general rules and exemptions. Certain exemptions can mean that you, as a seller, become obliged to charge VAT in another country on your sales.
Your services are covered by the general rules if they are not included in those listed under “Services that are exempt from the general rules”.
The general rule that applies when you sell services to taxable persons
As a general rule, when you sell a service to a taxable person such as a business, VAT is payable in the buyer’s country of establishment.
In order to decide on the country of taxation, you must determine:
- whether the buyer is making the purchase as a taxable person
- where the buyer is based or established
To be considered a taxable person, the buyer must be making the purchase for their business. If the buyer’s purchase is not made for their business (for example, if the service is intended for private use only), the sale is deemed to have been made to a non-taxable person.
If the buyer is making the purchase as a taxable person, you must determine their country of establishment. It is common for a buyer to be established in the country in which their economic activities are based. The buyer is based in the country in which the majority of important decisions about the business’s general management are reached. If this country is not Sweden, it means that the service is provided abroad. The buyer may also have fixed establishments in other countries, in which case you must determine the fixed establishment for which the service in question is being purchased. If the buyer does not have a base such as an office or a fixed establishment, the service is provided at the buyer’s place of residence, or where they stay on a permanent basis.
If you provide a service abroad, according to the circumstances outlined above, you must not charge any Swedish VAT on your sale.
Here’s how to report sales in your VAT return
When you sell a service to a taxable person in a country outside the EU, you must report the sale in Swedish kronor in box 40.
The general rule that applies when you sell services to non-taxable persons
As a general rule, when you sell a service to a non-taxable person such as a private individual, the service is provided and subject to VAT in the country in which you conduct business as a seller. This means that, as a seller based or established in Sweden, you must charge Swedish VAT regardless of the country in which the buyer is located.
Here’s how to report sales in your VAT return
Under the general rule, when you sell a service to a non-taxable person in a non-EU country, you must charge Swedish VAT on the sale and report it in your VAT return. You enter the sales amount in Swedish kronor in box 05, and the output VAT in box 10, 11 or 12, depending on the VAT rate that applies to the service you have sold.
Services that are exempt from the general rules
Certain types of services are exempt from the general rules. The general rules apply to your services if they are not included in those listed under the services that are exempt from the general rules.
Services that are exempt from both general rules
The following services are always exempt from the general rules, whether you sell them to taxable or non-taxable persons.
Real estate services
Sales of real estate services are considered to have been made in the country in which the property in question is located.
Examples of real estate services include:
- construction and building work
- property repairs and maintenance
- cleaning of premises and property management
- leasing of premises
- rental of rooms in hotel operations
- real-estate brokerage.
Passenger transport services
If passenger transport services are carried out within Sweden, the sale of these services is considered to have taken place here. In the case of passenger transport services between Sweden and other countries, sales are considered to have been made in the other country in question. VAT must also be charged in that country.
The passenger transport service regulations also apply to luggage services associated with passenger transport and, for example, ferry transport of buses 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. This applies to admission to the following types of events:
- cultural
- artistic
- sporting
- scientific
- educational
- entertainment-related
- events similar to those listed above.
The following are included:
- theatre and circus performances, amusement parks, concerts, exhibitions and other similar cultural events
- Sports events such as matches and competitions
- educational and scientific events such as conferences and seminars
- trade fairs and exhibitions.
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. If such services are sold on board a ship or aircraft in international traffic, they are subject to VAT abroad. Special rules apply to restaurants on trains.
For a service to be regarded as a restaurant or catering service, it must include not only the provision of food or drink, but also various services directly connected to the sale. These may include table setting, serving or the right to use specific premises and equipment, such as tables and chairs.
Services such as sales of takeaway foods in restaurants and delivery of food and drink to buyers do not count as catering services.
The rental service is sold and subject to VAT in the country in which you hand over the means of transport in question to the customer. If the maximum rental period is 30 days (or 90 days in the case of a vessel), this constitutes short-term rental.
Means of transport include the following, for example:
- cars, motorcycles, bicycles, three-wheeled vehicles and caravans
- trailers and semi-trailers
- tractors and other agricultural vehicles
- self-propelled mobile cranes
- vessels.
If the rental period exceeds 30 days – or 90 days for a vessel – it is considered long-term rental. Special rules apply to long-term rental to non-taxable persons.
Exceptions to the general rules: sales of services to non-taxable persons
The following exemptions are valid when you sell services to non-taxable persons (we will refer to them as “private individuals” from now on).
Brokerage services
Brokerage services are sold and subject to VAT in the country in which brokered goods are delivered or the services are sold. If a service is sold abroad, the brokerage service is also sold abroad.
Transportation of goods outside the EU
If the transportation of goods includes any movement outside the EU, sales are made and are subject to VAT abroad.
Cultural services and similar
Services connected with cultural and similar activities are considered to have been sold in the country in which they are carried out. This applies to the following types of activities:
- cultural
- artistic
- sporting
- educational
- scientific
- entertainment-related
- activities similar to those listed above.
This also applies to services that are necessary for carrying out such activities. The term “activity” also covers services other than providing admission to events. Such activities include providing the opportunity to engage in sporting activity – for example, the sale of ski lift passes.
Virtual activities sold in the buyer’s country
When you provide a virtual service connected with one of the activities listed above, the activity is considered to have been sold in the country in which the buyer is established or resident, or in which they stay on a permanent basis.
You might make the activity available to the buyer through streaming or other virtual means. The same rules apply to services that are necessary to provide this type of virtual service.
Transport-related services
Transport-related services are sold and subject to VAT in the country in which they are physically performed. Examples of such services include loading, unloading and handling of goods.
A transport-related service in connection with export is VAT exempt – even if you carry it out in Sweden.
Work carried out on goods (moveable property)
Services consisting of work on, or valuation of, movable property are regarded as sold in the country in which the service is performed. VAT is also payable in that country.
If the goods are dispatched to a non-EU country after you have completed the work, the service may be VAT exempt.
Examples of services carried out on moveable property include:
- assembly and installation
- repairs, servicing and maintenance
- processing, finishing and painting
- valuation (including insurance-related services)
- inspection and analysis
- animal grooming.
Digital services are considered to have been sold in the country in which the buyer is established or resident, or in which they stay on a permanent basis.
Digital services are as follows:
- electronic services
- telecommunications
- radio and television broadcasting.
As a seller, it can be hard to know where a buyer is resident. This is why there are regulations that make this easier to determine. According to these regulations, if the service:
- requires the buyer to be physically present at a particular place, such as an internet café, you must assume that the buyer is resident in that location
- is sold through a fixed landline, you must assume that the buyer is resident in the location in which the landline is installed
- is sold through a mobile network, you must assume that the buyer is resident in the country that is identified by the mobile country code of the SIM card that the buyer uses when they take receipt of the services
- requires a decoder or programme card, you must assume that the buyer is resident in the same location as the decoder or similar equipment – or if this location is unknown, in the place to which your programme card is sent for you to use.
If none of the above circumstances apply, you must obtain two separate forms of evidence indicating the location in which the buyer lives. Examples of such evidence to which you may have access include the buyer’s billing address, their computer’s IP address, or their bank card details.
The rental service is sold and subject to VAT in the country in which the customer is resident, established or in which they stay on a permanent basis (the term “resident” will now be used). You must be able to determine where the buyer of the service is resident, and you need two types of evidence for this. These two pieces of evidence must indicate one of the following:
- the buyer’s billing address
- bank details – for example, the bank at which the bank account is held for payment purposes, or the billing address listed with the bank for the buyer
- registration details for the means of transport rented by the customer (if registration is required in the location in which the means of transport is used), and other similar details
- other relevant business-related details.
If the rental period is longer than 30 days (or 90 days in the case of a vessel), this constitutes long-term rental.
Means of transport include the following, for example:
- cars, motorcycles, bicycles, three-wheeled vehicles and caravans
- trailers and semi-trailers
- agricultural vehicles
- mobile cranes powered by their own motor
- vessels.
If the maximum rental period is 30 days – or 90 days for a vessel – this constitutes short-term rental, in which case other rules apply.
Short-term hire of means of transport (such as cars or bicycles)
Miscellaneous services
If someone sells one of the following services to private individuals, the service is considered to have been sold in the country in which the buyer is established or resident, or in which they stay on a permanent basis:
- the granting or transfer of ownership of copyright, patent rights, licence rights, trademark rights and similar
- promotional and advertising services
- services provided by advisers, engineers, consulting firms, legal experts and auditors, and other similar services, as well as data processing and the sale of information
- banking and financial services (apart from rental of storage spaces), and insurance and reinsurance services
- sale of labour
- rental of goods that constitute moveable property, other than means of transport
- obligations to refrain, in whole or in part, from exercising any of the rights referred to in the first point listed above, or from engaging in certain activities
- access and transfer or distribution through:
a) a natural gas system located within EU territory, or a gas network that is connected to such a system
b) an electricity system
c) a heating or cooling system - services that are directly connected to the types of services referred to in the previous point above.
The services listed above are sold and subject to VAT in Sweden if they are used and their benefits are realised in this country.
Here’s how to report your sales when you have sold services under the exemption regulations
There are various ways in which you must report your service sales in your VAT return, depending on where the services that you have sold are subject to VAT, or on whether they are exempt from VAT.
Services that are sold and subject to VAT in Sweden
If you sell services that are subject to VAT in Sweden under one of the exemption rules, you must charge Swedish VAT on the sale and report it in your VAT return. You enter the sales amount in Swedish kronor in box 05, and the output VAT in box 10, 11 or 12, depending on the VAT rate that applies to the service you have sold.
Services that are sold but exempt from VAT in Sweden
If you sell services that are exempt from VAT, you must not charge any VAT on them. You must report the sale in Swedish kronor in box 42 of your VAT return.
Services that are sold and subject to VAT abroad
If you sell services that are subject to VAT abroad, you must not charge Swedish VAT on it. You must report the sale in Swedish kronor in box 40 of your VAT return.
If you sell services that are subject to VAT in another country, you may have to register for VAT in the country in question so that you can charge and report VAT there. To find out whether you need to do so, you must contact that country’s tax authority.
Here’s how to report sales of real-estate services
If you sell real-estate services to a buyer abroad, and the property is located in Sweden, you must charge Swedish VAT on the sale and report it in your VAT return. You enter the sales amount in Swedish kronor in box 05, and the output VAT in box 10, 11 or 12, depending on the VAT rate that applies to the service you have sold.
If your non-Swedish buyer conducts construction business activities in Sweden, and the property with which your real-estate services were associated is located in Sweden, the regulatory requirements for reverse-charge liability must be fulfilled. The buyer must then register for VAT in Sweden, and report VAT on their purchase in their Swedish VAT return. You must not charge VAT on the sale, but you must still report it in your VAT return. You must report the sale in box 42 of your VAT return.
If you sell real-estate services to a non-Swedish buyer, and the property is located in another country, you may have to charge VAT in that country. To find out whether you need to do so, you must contact that country’s tax authority.
Legal guidance
Services that are exempt from the general rules (Legal guidance in Swedish) External link.
Services (Legal guidance in Swedish) External link.
Exceptional cases that are treated as exports (Legal guidance in Swedish) External link.