VATupdate

Mosquito control service to the municipality against compensation constitutes turnover subject to VAT

  • The Supreme Administrative Court has ruled that a company that provided mosquito control, which was financed with funds from municipalities, the Swedish Board of Agriculture and the Swedish Environmental Protection Agency, sold VAT-liable services.
  • The company was commissioned by the municipalities in the area around the lower Dalälven to conduct mosquito control to improve the outdoor environment. 
  • Part of the compensation that the company received for the services was paid by the municipalities with municipal funds, while the remaining part consisted of government grants that were paid directly to the company. 
  • The court finds that there was a legal relationship between the company and the municipalities which entailed a mutual exchange of services. 
  • Furthermore, there was a direct link between the provision of the services and the compensation that the company received because the company, as a taxable person, provided services for remuneration to the municipalities and the remuneration constituted the actual equivalent value for those services. 
  • The direct connection was not affected by the fact that part of the compensation that the company receives for the provision of the services consists of government grants
    (HFD 2020-12-23, case no. 2453-20).

Source: skatteverket.se

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