- The Supreme Administrative Court in Sweden has ruled that VAT apportionment rules violate EU law.
- The rules requiring determination of the deductible proportion of residual input tax based on “reasonable grounds” were found to be incompatible with the VAT directive.
- The Swedish Tax Agency interpreted “reasonable grounds” as usage of acquired goods and services, while the taxpayer argued for the turnover-based method.
- The SAC determined that the reasonable grounds rule does not meet the requirements set by the CJEU for implementation of the VAT directive.
- In the absence of a valid rule, the taxpayer can rely on the VAT directive’s provisions on apportionment based on turnover.
Source: kpmg.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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