How does VAT work for a Swedish e-commerce business when selling to an EU country?
Within the EU, VAT rules for e-commerce depend on whether the sale is made to individuals (B2C) or businesses (B2B) and where the customer is located.
Below is an overview of VAT rules for e-commerce within the EU:
- Sales to individuals (B2C)
If the seller is registered for VAT in the country where the customer is located, the seller must charge VAT in that country and report it there.
If the seller is not registered for VAT in the country where the customer is located, the seller must charge VAT in the country where the seller is registered after the total consumer turnover to other EU countries exceeds the turnover threshold of SEK 99,680.
As long as the total consumer turnover to other EU countries is below SEK 99,680, the VAT is reported by the seller in the same way as in the seller's own country.
To facilitate VAT regulation for e-commerce companies with customers in several EU countries, a new VAT rule called One Stop Shop (OSS) was introduced on July 1, 2021. This means that e-commerce companies can register for OSS in an EU country and report and pay VAT for all sales to consumers in other EU countries in a single VAT return. The application for Swedish e-commerce businesses is made to the Swedish Tax Agency HERE.
Call the Swedish Tax Agency's information service at +46 771 567 567 to find the right way for your e-commerce business.
- Sales to businesses (B2B)
If both the seller and the buyer are registered for VAT in their respective countries, the VAT is normally zero-rated, and VAT regulation is done through a so-called reverse charge mechanism. This means that the VAT-liable buyer reports input and output VAT to the same amount so that the net amount is zero.
It is important to note that VAT rules may vary depending on the EU country in question, and it is therefore important to check the exact VAT rules for each country and situation.
Call the Swedish Tax Agency's information service at +46 771 567 567 to find the right way for your e-commerce business.