Swedish Court Confirms EU VAT Deduction Methods for Mixed Property Companies

• The Swedish Supreme Administrative Court ruled in June 2025 that property companies with mixed business activities can use EU directive methods to calculate VAT deductions on common costs
• The case involved a property company renting both residential premises exempt from VAT and commercial premises subject to voluntary VAT registration
• The court confirmed companies can use the turnover based calculation method from the EU VAT Directive to determine deductible input VAT on common costs
• The ruling referenced a previous 2023 decision finding that Sweden’s reasonable basis allocation rule lacks the clarity and precision required for proper EU directive implementation
• This decision allows property companies with mixed activities to benefit from EU harmonized VAT calculation methods instead of being limited to potentially less favorable Swedish domestic rules

Source: schjodt.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.

---

---