- The previous position on “Ongoing services terminated before contract period ends, VAT” is no longer applied as of 2026-04-02, but this does not change the substance of the rules.
- Payments made by buyers for early termination of ongoing service contracts are considered compensation for the provision of a service and are subject to VAT.
- This applies whether the right to terminate is in the original contract or in a subsequent agreement, and regardless of whether the buyer continues to use the service during the notice period.
- The compensation guarantees the seller a minimum income and is taxable, even if the amount differs from what the seller would have received if the contract had not been terminated.
- Such compensation is not the same as compensation for contracts terminated before any service has been provided.
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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