Government backs down on double VAT

The government wants to solve the problem of double VAT that hits app companies. The Confederation of Swedish Enterprise, together with IT&Telecom companies, welcomes new guidelines for EU member states but believes that the government is avoiding the main question of how the rules came about in the first place.

The Confederation of Swedish Enterprise, together with IT&Telecom companies and others, is pushing the issue of Swedish double VAT, which hits app companies hard. This week, Anders Borg explained in Parliament that the government is working intensively to adopt guidelines at EU level on how the common VAT rules should be interpreted, thus avoiding VAT being charged twice on the same transaction.

- It is good if we get guidelines within the EU, but the government avoids the main issue: a double VAT should not be possible at all. VAT is a consumption tax, not a business tax. VAT has a common EU framework and therefore there are no double taxation agreements. Sweden is obliged to comply with the EU Treaty and take into account the ban on double taxation in order for the EU's internal market with free movement to function," says VAT expert Anna Sandberg Nilsson, Swedish Enterprise.

In 2015, the EU will have new rules on which country can tax these services. One of the main issues is that EU member states disagree on who actually sells to the customer - the app company or the intermediary. This problem will not be solved by the regulations coming in 2015.

- "If the Swedish Tax Agency continues to double-tax companies, this industry will not exist in Sweden by 2015," says Anna Sandberg Nilsson, who has been involved in pushing the issue of double VAT on apps since 2009.

Much of what has been said and written on the subject can be found at dubbelmomsnejtack.se or on Facebook.