VAT and excise duty exemption: Defence Cooperation Agreement
US forces and their relatives can be granted exemption from VAT and excise duty on certain goods and services in Sweden, under a special agreement called the Defence Cooperation Agreement (DCA).
The DCA covers VAT and excise duty on sales of certain goods and services for official use by or for US forces. Exempted goods include tobacco goods, alcohol goods, fuels, e-liquids and other nicotine goods, and certain electronic goods. The exemption can be applied in two ways.
Exemption at point of purchase
If a seller is entitled, and wishes, to sell goods and services without charging VAT or excise duty, US forces can be granted exemption from VAT or excise duty directly at the time of sale. This is known as point-of-purchase exemption.
Exemption via a refund
If the seller chooses not to apply point-of-purchase exemption, US forces can apply for a quarterly refund of VAT and excise duty charged by this seller on goods and services covered by the exemption.
If the goods and services are for private use by US forces personnel or their dependents, the Swedish seller cannot apply point-of-purchase exemption. US forces personnel and their dependents can apply for a refund on a quarterly basis instead.
If you sell goods or services for official use by or for US forces
According to Article 16 of the DCA, you can, under certain circumstances, sell goods or services designated for US armed forces without charging VAT and certain excise duties. You do not need to contact the Swedish Tax Agency for a special decision or permission in order to make a sale without charging VAT or excise duty.
In order to sell excise goods without charging excise duty at the point of sale, you must be an authorised warehouse keeper or an approved stockist. Point-of-sale exemption applies to duty-liable tobacco goods, alcohol goods, fuels, e-liquids and other nicotine goods, and certain electronic goods.
You must not sell other excise goods with point-of-purchase exemption. US forces can apply for a refund of excise duty on such goods instead.
You can claim a deduction in your excise duty return
When selling tobacco goods, alcohol goods, fuels, and e-liquids and other nicotine goods, you must report excise duty on sales of goods for official use by or for US forces in your regular excise duty return. As an authorised warehouse keeper or approved stockist, you can claim a deduction in your excise duty return for duty paid on these goods. Excise duty liability is not incurred when selling electronic goods for official use by or for US forces.. Such sales do not therefore need to be reported in an excise duty return.
Reporting sales in your VAT return
If you are registered for VAT, you must report VAT-exempt sales of goods or services for official use by or for US forces in box 42 of your regular VAT return.
Point-of-purchase exemption requirements
In order for you to apply point-of-purchase exemption and sell goods or services without charging VAT or excise duty, the following requirements need to be fulfilled:
- The goods or services must be delivered in Sweden for US armed forces.
- The goods or services must be for use by or for these forces.
- The buyer can presenting a DCA certificate from the US forces which shows that these requirements have been fulfilled.
- In the case of excise goods, the sales invoice must state that excise duty has not been charged on the sale.
The goods or services must not be delivered to a country of destination other than Sweden.
“Use by or for US armed forces” means that the goods or services must benefit US forces in some way. However, direct supply to US forces is not necessary. The requirement is that the goods or services must be used by or for US forces. Use “by” US forces includes official use by civilian personnel accompanying them, or by the forces’ messes, canteens or similar service facilities. Military service facilities are integral parts of US forces' operations that can sometimes be run by other organisations or suppliers. Examples of the services provided include training and the sale of goods specifically for forces personnel.
Use “by or for” US forces means that the VAT or excise duty exemption also includes supply to a business that will use the goods in fulfilling a contract with US forces. The contracted business therefore uses the goods or services “for” US forces.
Details that must be included in a DCA certificate
As a seller, you must be able to present a DCA certificate issued by the US forces. A DCA certificate must include the following details:
- A description of the goods or services to which the certificate relates, and a statement by the US armed forces that the goods or services are intended for official use by or for the US forces.
- The name and address of the party that is entitled to VAT or excise duty exemption for the goods or services to which the certificate relates.
- The name and address of the seller of the goods or services to which the certificate relates.
- The name and position of the US forces representative who has signed the certificate.
Save the original DCA certificate, or a copy of it, in your accounting records so that you can present it to the Swedish Tax Agency on request.
Exemption from DCA certificate requirement
The DCA certificate requirement does not apply to sales made by the Swedish Armed Forces. There is also no requirement for a DCA certificate for sales made in the context of a military service facility.
If you are a supplier and make purchases in order to sell goods or services that will benefit US forces
If, as a supplier, you make purchases in Sweden in order to sell goods or services that will benefit US forces, you are entitled to make your purchases without paying VAT or excise duty. You can make such purchases from a seller who is entitled, and wishes, to sell goods and services without charging VAT or excise duty (point-of-purchase exemption). To avoid paying VAT or excise duty on a purchase, you must present a DCA certificate to the seller.
If you are an authorised warehouse keeper or an approved fuel stockist, and you are a supplier to the US forces, you can also claim a deduction for fuel consumed in carrying out tasks that are necessary in order to supply another item or service to US forces.
If you are registered for VAT in Sweden, you are normally entitled to an input VAT deduction even if you sell goods and services to US forces without charging VAT. Usually this means there is no need for you to apply VAT exemption when making a purchase.
Purchases made by US forces, US forces personnel and their dependents
In certain circumstances, US forces can buy goods or services in Sweden for official use on a point-of-purchase exemption basis. This means that the seller does not charge VAT and certain excise duties on these sales. If a seller chooses not to apply point-of-purchase exemption, the US forces must pay VAT and excise duty at the time of purchase. They can then apply to the Swedish Tax Agency for a refund of VAT and excise duty.
Members of US armed forces (including civilian personnel) and their dependents are not entitled to buy goods and services in Sweden for private use without paying VAT and excise duty at the time of purchase. However, they can apply to the Swedish Tax Agency for a refund of VAT or excise duty.
Purchases for official use by US forces
When US forces buy goods or services in Sweden for official use, they can sometimes make these purchases on a point-of-purchase exemption basis. This means that the seller does not charge VAT and certain excise duties on these sales. The seller is free to decide whether or not to apply point-of-purchase exemption. If the seller chooses to charge VAT or excise duty, the buyer can apply for a VAT or excise duty refund instead.
“Official use” means that the goods and services must be used by or for US forces. Use “by” US forces includes official use by civilian personnel accompanying them, or by the forces’ messes, canteens or similar service facilities. Military service facilities are integral parts of US forces' operations that can sometimes be run by contractors or other organisations. Examples of the services provided include training and the sale of goods specifically for forces personnel.
Use “by or for” US forces means that the VAT or excise duty exemption also includes supply to a business that will use the goods in fulfilling a contract with US forces. The contracted business therefore uses the goods or services “for” US forces.
The goods or services must not be delivered to a country of destination other than Sweden.
The seller must also present a DCA certificate issued by the US forces in order to sell goods or services without charging VAT or excise duty. Further information for sellers about fulfilling the point-of-purchase exemption requirements is available under the heading “If you sell goods or services for official use by or for US forces”.
If you sell goods or services for official use by or for US forces
If a seller chooses not to apply point-of-purchase exemption, the US forces must pay VAT and excise duty at the time of purchase.
Apply for a refund using form SKV 5651
If US forces paid VAT or excise duty at the time of purchase, they can apply to the Swedish Tax Agency for a refund by filling in form SKV 5651, Application: Refund of value-added tax (VAT) and certain excise duties – Purchases for official use for armed forces. An authorised representative of the US forces must make the application.
Each application must relate to purchases made during one particular calendar quarter (for example, January-March). You can submit an application before the end of the calendar quarter if you do not intend to apply for a refund for further purchases made during that quarter. You must submit copies of your invoices to us with your application. Your invoices must include the following details:
- seller’s name, address and VAT registration number
- buyer's name and address
- date of delivery or provision
- description of goods or services
- quantity
- VAT amount(s)
- total price (including excise duties and VAT)
The Swedish Tax Agency will make a VAT and excise duty refund payment within 30 days of receiving a complete application. Email the form or send it to the following postal address:
Email address
Postal address
Skatteverket
SE-771 83 Ludvika
Purchases for private use by US forces personnel and their dependents
In accordance with Article 17 of the DCA, members of the US armed forces (including civilian personnel) and their dependents are entitled to a refund of input VAT and excise duty on purchases in Sweden of goods and services for private use. According to the DCA, a dependant is a family member who depends on a member of the US forces either financially, legally or for health reasons. A dependant must live with, and be supported by, this armed forces member and must have been authorised by the US forces to accompany them to Sweden.
The right to a refund only applies to purchases made for private use. This right does not apply if US forces buy goods with the intention of reselling them directly.
The goods or services purchased must not be delivered to a country of destination other than Sweden. This means, for example, that input VAT cannot be refunded on deliveries to countries other than Sweden.
Ansök på blankett SKV 5652
In order to receive a VAT or excise duty refund, you must apply for it using form SKV 5652, Application: Refund of value-added tax (VAT) and certain excise duties – Members of the U.S. forces and dependents for personal use within DCA.
Each application must relate to purchases made during one particular calendar quarter (for example, January-March). You can submit an application before the end of the calendar quarter if you do not intend to apply for a refund for further purchases made during that quarter. You must submit copies of invoices to us with your application. These invoices must include the following details:
- seller’s name, address and VAT registration number
- buyer's name and address
- date of delivery or provision
- description of the goods or services
- quantity
- VAT amount(s)
- total price (including excise duties and VAT)
You must submit documentation showing that you are authorised to apply for a refund.
The Swedish Tax Agency will make a VAT and excise duty refund payment within 30 days of receiving a complete application.
Email the form or send it to the following postal address:
Email address
Postal address
Skatteverket
SE-771 83 Ludvika
Rättsinformation
- US armed forces (Legal guidance, in Swedish)
External link. - The seller must hold a VAT or excise duty exemption certificate (Legal guidance, in Swedish) External link.
- Excise duty on tobacco goods (Legal guidance, in Swedish) External link.
- Excise duty on alcohol goods (Legal guidance, in Swedish) External link.
- Excise duty on fuel (Legal guidance, in Swedish) External link.
- Excise duty on nicotine goods (e-liquids and other nicotine goods) (Legal guidance, in Swedish) External link.
- Excise duty on chemicals in certain electronic goods (Legal guidance, in Swedish) External link.
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