Court ruling allows turnover-based calculation method for mixed activities

• The Supreme Administrative Court of Sweden has ruled that a turnover-based calculation method can be applied with direct effect in cases of mixed activities.
• This means that a taxable person cannot be denied the use of such a calculation method to determine the deductible input tax on common costs.
• The Swedish Tax Agency’s position on the deduction of VAT does not fully align with the court’s ruling on mixed activities, so they will review their position.
• The agency will also review its position on VAT refunds for taxable persons established in Sweden who carry out transactions in other EU countries.
• The court’s ruling only applies to mixed activities within an economic activity, and other situations may require a separate allocation of input tax.
• The European Court of Justice has clarified that the VAT directive does not provide rules for the allocation between economic and non-economic activities, leaving it to the discretion of member states.
• The same applies to the allocation of purchases for both business and private use.
• In these situations, the allocation should be made according to the provisions of the VAT Act.
• The Swedish Tax Agency will further develop its position in other situations as part of its review of its positions on the allocation of input tax.

Source: www4.skatteverket.se

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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