Before starting a business

These terms relate to different areas and it is important not to confuse them.

Fixed establishment relates specifically to VAT.

Permanent establishment relates primarily to income tax, but also to other areas of taxation.

F-tax certification means that your business is responsible for paying preliminary tax and employer contributions on income from work carried out. If your business is not F-tax certified, your clients will be responsible for deducting preliminary tax and paying employer contributions. For this reason, many Swedish companies prefer to hire companies with F-tax certification.

F-tax certification is not essential if your only business activity is the sale of goods, as preliminary tax and employer contributions do not need to be paid in connection with these sales.

To be granted F-tax certification, your business must meet certain criteria, and you must apply for approval. You can apply through the e-service “Registration of foreign companies in Swedenexternal link”.

Register a business

Yes, you can apply for business registration before starting operations. In some cases, you may need to provide proof of your intention to commence operations, for example documents relating to investments, contracts or marketing activities.

You should register as an employer when you have signed a contract of employment with one or more staff.

Feedback

Processing times are generally between two and eight weeks, depending on the checks the Swedish Tax Agency needs to make. This timeframe is dependent on all forms being correctly filled in, and all necessary supporting documentation being provided together with your application.

We will notify you in writing when we have reached a decision. If your application is approved, we will automatically send a registration document to your company’s address.

Taxes, fees and VAT

As a rule, a seller of goods or services is responsible for reporting VAT on each sale and paying it to the state. Under the reverse charge mechanism, the buyer has this responsibility instead.

Here you can find out what the reverse charge mechanism means both for sellers and buyers.

The VAT rate is stated as a percentage of the VAT-liable amount, which means the sale price before VAT. Sometimes it can also be useful to calculate VAT as a proportion of the price including VAT. The table below shows the relationship between these rates.

You may deduct input VAT on purchases of goods, services and imports used to carry out your VAT-liable business activities. This applies to purchases linked to your company’s VAT-liable turnover, or to turnover that entitles you to a deduction. You report the VAT that you have the right to deduct in box 48 of your VAT return.

The right to deduct VAT

If you sell VAT-liable goods and services, you have the right to deduct the VAT on purchases made in connection with the goods and services you sell. In your VAT return, you should report VAT on your sales and acquisitions within the EU, and deduct the VAT that you are allowed to deduct from your purchases.

If the VAT on sales and acquisitions within the EU is greater than the VAT on purchases reported in your VAT return, you must pay the difference to the Swedish Tax Agency.

If the deductible VAT paid on purchases is greater than the VAT on sales and acquisitions within the EU reported in your VAT return, the excess will be refunded to you. The refund will be paid into your tax account with the Swedish Tax Agency.

The right to a refund

You are entitled to a VAT refund if you sell goods or services that are exempt from VAT. In such cases, you do not add VAT to your sales invoice, and you do not report any output VAT to the Swedish Tax Agency. However, you are still entitled to a VAT refund on purchases made in connection with the VAT-exempt goods and services you have sold.

In order to receive a VAT refund, you have to:

  • request a refund in your VAT return
  • provide supporting documentation (such as an invoice) to verify your purchase
  • send the Swedish Tax Agency an original copy of a paper VAT return that has been signed by an authorised signatory, or file the VAT return online yourself or through a VAT representative

You are not allowed to deduct VAT for the following:

  • purchases with a direct connection to VAT-exempt business operations
  • purchases intended for private use
  • a passenger vehicle or motorcycle, unless the purchase is made for a purpose such as resale
  • the full cost of vehicle hire (normally you can deduct 50% of the total amount of VAT)
  • purchases of permanent residential property
  • business representation expenses, where limitations on VAT deductions apply

If you sell both VAT-liable and VAT-exempt goods or services, you are running a partly exempt business. If this is the case, there are certain limitations regarding the right to make deductions.

You can deduct all of the VAT on the following:

  • purchases made for the VAT-liable part of the business
  • common purchases intended for use at least 95% of the time in the VAT-liable part of the business, or the part that entitles you to a refund
  • common purchases for the business if it is more than 95% VAT-liable and the input VAT on individual purchases is less than SEK 1,000

You are not allowed to deduct any VAT for purchases made for the VAT-exempt part of the business.

If you make a purchase for use in both your VAT-liable and VAT-exempt business activities, you should deduct a percentage of the VAT proportional to how much it is used in your VAT-liable business activities.

Tip: You should inform the Swedish Tax Agency of the percentages you are using, and outline how you have calculated the split for the VAT: for example, in proportion to use.

To apply for a VAT refund, you can either file a VAT return yourself, or use a VAT representative. Your representative can file the return using our e-service.

Register your VAT representative by completing the form below. Please send the form to the address marked on it.

In order to get a VAT refund, it is compulsory for companies that are established outside the EU – and are liable for Swedish VAT – to use a VAT representative. The VAT representative must be based in Sweden or in the European Economic Area (EEA). The representative should file the VAT refund application.

The VAT representative must file all VAT returns, including when you need to pay VAT or report zero VAT.

Register the name of your VAT representative by completing the form below. Please send the form to the address marked on it.

No. A refund can only be made to you, and paid into your own bank account.

If you are not satisfied with the Swedish Tax Agency’s decision, you can ask us to review it. You do this by sending a written request to your tax office.

Please use our review request form. This shows you which information should be included in your review request.

You must submit your review request by the end of the calendar year that starts six years after the end of the tax year in question. So if your request relates to the tax year 2020, we should receive your request by 31 December 2026.

Tax payment respite

When you request a review, you can also apply for tax payment respite. To defer a payment, you have to fill in a form and send it to your tax office. All addresses are listed on skatteverket.se under “Kontakta ossexternal link” (“Contact us”).

Appealing against the Swedish Tax Agency’s decision

The Administrative Court

If you are not satisfied with the Swedish Tax Agency’s decision, you can appeal to the Administrative Court. The appeal must be made in writing and sent to the Swedish Tax Agency. You must submit your appeal no later than the end of the calendar year that starts six years after the tax year in question.

The Administrative Court of Appeal

If you are not satisfied with the Administrative Court’s decision, you can appeal to the Administrative Court of Appeal. The appeal must be made in writing and sent to the Administrative Court that has taken the decision that you wish to appeal against. Your appeal must reach the Administrative Court no later than two months after the date on which you received notice of the decision you wish to appeal.

The Supreme Administrative Court

You can appeal to the Supreme Administrative Court against a decision made by the Administrative Court of Appeal. Your appeal is only considered admissible if the Supreme Administrative Court grants you leave to appeal.

Employers

Social security contributions for sole traders are called self-employed contributions (“egenavgifter”) in Sweden. You will usually need to pay self-employed contributions in Sweden if you live in Sweden and run your business here

Exemptions to self-employed contributions

Some sole traders are exempted from paying self-employed contributions in Sweden. For example, you are exempted if you normally conduct business as a sole trader in another EU/EES country or Switzerland and are in Sweden to conduct the same type of business for up to 24 months. In this case, you will continue to pay social security contributions in the country in which you normally work.
To be exempted from paying self-employed contributions in Sweden, you must provide a document confirming that you are covered by another country’s social security system. This document is titled A1 or E101 in the EU/EES and Switzerland.

You can request this document from the social security agency in the country in which you normally work.

You can sign a social security agreement with your employees in Sweden if you do not have a permanent establishment here. The agreement states that your employees are responsible for declaring and paying their own employer contributions, instead of your company doing this.

Your employees must register to pay their own employer contributions within two weeks of signing the social security agreement. They do this by filling in form SKV 4738, which can be downloaded from the Swedish Tax Agency’s website. If you have signed a social security agreement with your employees, you must still provide a statement of earnings and tax deductions at the end of the year.

The rate you must pay depends on whether or not your company has a permanent establishment in Sweden.

If you company has a permanent establishment, your employer fees will be 31.42% of each employee’s gross salary.

If your company does not have a permanent establishment in Sweden, your employer fees will be 19.8% of each employee’s gross salary.

Invoicing

If you sell a service to a company, you must normally issue the company with an invoice. For smaller services or sales to private individuals, a receipt may be sufficient.

Here you can find out about invoicing for services and what your invoices should include.

Regardless of the invoice currency, you must also specify VAT in SEK.

Exceptions

If your reporting currency is the euro, you may specify Swedish VAT in euros. If you need to convert the VAT amount to SEK, you must use one of the following exchange rates:

  • the joint mid-price set by Nasdaq OMX Stockholm AB; published, for example, on the website of Sweden’s central bank: riksbank.seexternal link
  • the exchange rate published by the European Central Bank
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