Impact of Swedish VAT Act Changes on TOGC Exemption for VAT-Exempt and Mixed Businesses

• Sweden has implemented Article 19 of the EU VAT Directive regarding the transfer of going concern (TOGC) exemption from VAT.
• The Swedish VAT Act requires the transferee to be entitled to deduct input VAT for the TOGC exemption to apply.
• The Swedish Tax Agency previously allowed the TOGC exemption if the transferee could deduct input VAT to the same extent as the transferor.
• An insurance company sought an advance ruling on whether the exemption applies when the transferee cannot deduct input VAT.
• The Board for advance rulings and the Supreme Administrative Court ruled that the exemption does not apply if the transferee cannot deduct input VAT.
• This ruling may significantly impact the transfer of VAT-exempt and mixed businesses in Sweden, potentially causing VAT leakage.

Source: taxand.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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