Allocation of Input VAT: Deductions, Private Use, and Restrictions under Swedish and EU Law

• The Swedish Tax Agency (Skatteverket) has updated its position on the allocation of input VAT, reflecting recent Supreme Administrative Court rulings.
• Input VAT is only partially deductible if acquisitions are used both for economic activities and for private purposes or are subject to deduction restrictions.
• Allocation between economic and private use should be based on the proportion of use during the year of acquisition.
• The VAT Directive’s rules on allocation apply only to mixed activities, not to cases involving deduction restrictions or private use, except in certain situations where the directive can be applied directly.
• If multiple allocations are needed, the taxpayer may choose to apply the VAT Directive for the mixed activity portion, with initial allocation based on resource consumption.

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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