Why have our company been contacted about this?
Your company are or have been a client of Business Sweden´s Employment Services on and/or after March 2020.
What happened in March 2020?
There was a ruling from the Court of the European Union about VAT on Services similar to the Employment Services provided by Business Sweden. In a later interpretation and reply from the Swedish Tax Authorities, Employment Services (salaries and expenses related to employees hired on-behalf of Business Sweden´s clients, “Designated Service Providers”) should be considered a service eligible for VAT for Swedish companies.
What will happen now?
Effective from 1 June 2021, Employment Services will be billed with VAT on a monthly basis. It will not be only the fees billed by Business Sweden for administration, but also salaries and expenses paid on behalf of clients and your employees, “Designated Service Providers”.
What about retroactive adjustments?
In June, you will receive two corrective invoices. There will be one invoice with corrections during the period from March to December 2020 and one invoice with corrections during the period from January to May 2021. The invoices will be distributed using our regular billing channels.
Does our company need to make retroactive corrections of all VAT-returns back to March 2020?
No, you will receive the corrective invoices in June 2021 and the invoices should be reported in the VAT-return eligible for filing after 30 June 2021.
Will there be any problems for our company to get deductions in our VAT-return for these invoices?
In general, the clients of Business Sweden get full deductions of incoming VAT for Employment Services. In some very rare cases, one or two clients might not get a full deduction because of the business they are carrying out. Business Sweden, however, needs to comply with the tax legislation of Sweden and cannot avoid billing Employment Services with VAT to Swedish companies after March 2020.
Will there be additional corrections in the international markets where the subsidiaries of our company are working with Business Sweden?
Currently, Business Sweden is not aware of any country where there will be additional corrections. Local and Swedish legislation as well as interpretations of the legislation might, however, change in the future which Business Sweden needs to adhere to.
Whom should I turn to if I have additional questions?
Please do not hesitate to contact the Finance department of Business Sweden in Stockholm through firstname.lastname@example.org or tel: +46 8-588 660 00.