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Update: Division of Input VAT for Transactions between Establishments

  • The content on the page has been updated regarding the division of input value-added tax (VAT).
  • If a purchase only allows for partial deduction, the input tax should be divided.
  • The division should be done according to the provisions in the VAT Act, unless the taxable person invokes the VAT directive with direct effect.
  • If the actual use is not known at the time of acquisition, the input tax should be divided based on a reasonable basis.
  • The division should reflect the resource consumption in the business as much as possible.
  • If a taxable person has establishments in multiple countries, only the outgoing transactions in the establishment(s) related to the input tax should be considered.
  • In certain situations, multiple divisions may be necessary to determine the resource consumption for a specific acquisition.
  • An example is when a company has establishments in multiple countries and a purchase is used by one establishment for supporting work for another establishment.
  • In such cases, a division based on internal invoicing may be more appropriate.
  • The percentage for the deductible portion should be calculated with at least two decimal places.
  • When calculating the deductible portion, only the turnover related to the acquisition should be considered, even if the VAT directive is invoked with direct effect.
  • An example is given of a company with establishments in five EU countries purchasing desks for 500,000 SEK, with VAT of 100,000 SEK.
  • The desks are used solely by the employees of the establishment in Sweden for the entire establishment’s operations.
  • The establishment in Sweden also performs supporting work for the establishment in Denmark regarding all activities in the Danish establishment.


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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