Taxation of services in foreign trade
From the 1 January 2010 are two main rules for the taxation of services in foreign trade.
The new main rules are aimed at every one service is considered to be traded at:
– sales to traders
– sales to someone who is not a trader (t.ex. private citizen)
The general principle is that a service is taxed in the country where it is consumed. The rules apply whether the purchaser is within or outside the EC. However made exception to the general rules, which means that for some services will not be any change to the current rules.
General rule of sales to traders
When selling a service to a business service to be considered traded in the country Buyer (trader) is established at the time the service is provided. Trader would be established in which he has his place of business or a fixed establishment. (Missing buyer seat or fixed establishment, the service translated where the purchaser resides or habitual abode).
The above means that if Buyer is a trader established in a country other than Sweden, the seller does not charge any VAT (service is sold free of VAT). However, the buyer must act as a trader (Buyer must provide their VAT number, momsregistreringsnummer ), ie. services may not be for purely private purposes.
General rule for sales to individuals
When selling services to anyone who is not a trader (t.ex. private citizen) means that services are considered traded and will be taxed in the country where Seller is established.
The above means that the seller must charge Swedish VAT regardless of what country the buyer is.
EXEMPTIONS FROM THE MAIN RULES
Exceptions to the general rule when selling services to traders
Goods transport and work on movable property (freight transport and transport-related services such as loading and unloading) exclusively used or otherwise credited to outside the EC are traded abroad if the buyer is a trader.
Exceptions to the general rule on the sale of services to individuals
Transaction services provided to someone who is not a trader (t.ex. a private person) are traded, where the main transaction is (where mediation is).
Transport (goods) performed in Sweden are supplied within the country.
Transportation-related services (t.ex. loading or unloading) are traded in the country where the service is physically carried.
Work on movable property (services consisting in valuations of, or work on movable property (t.ex. reparation) is supplied in the country where the services are physically carried out.
Intellectual services – these services are often called intellectual services or “Section 7-Services” will not be covered by the general rule when the buyer is someone who is not a trader (t.ex. a private person) outside the EC. The exception to the general rule means that sales are traded abroad.
For sales within the EC, the principal rule, ie. the seller of intellectual services from outside the EC to someone who is not a trader in Sweden to declare and pay VAT in Sweden.
Examples of intellectual services, advertising, advertising, data services, information, bank- and financial services, Insurance, temporary employment, telecommunications and electronic services.
Exemption from both main rules
Property services related to a particular property is traded in the country where the property is.
Passenger transport wholly performed within Sweden are traded here and other transportation are traded abroad.
Restaurant- and catering services are supplied where the services are physically carried out.
Short term rental of vehicles (t.ex. a car, at most 30 day) are traded in the country where the customer collects transport.