Sweden’s Supreme Court Allows Turnover-Based Calculation for Deductibility of Input VAT in Mixed Activities

• Sweden’s Supreme Administrative Court ruled that the deduction of input VAT for mixed activities can be calculated based on turnover.
• The decision could result in an expanded input VAT deduction for certain businesses.
• The case involved a company engaged in both VAT taxable and non-taxable activities.
• The Swedish Tax Agency disallowed the deduction, but the court granted the company the right to apply a turnover-based distribution method.
• The court stated that Sweden has not correctly incorporated the VAT Directive regarding the deductibility of input VAT in mixed activities cases.
• Taxpayers can rely directly on the provisions of the directive for calculating deductible input VAT based on the principle of the direct effect of EU law.

Source: bdo.global

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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