Sweden Proposes Turnover-Based Allocation Key for Deductible Input VAT

Sweden proposes changing the default method for allocating deductible input VAT on mixed-business overheads from “reasonable grounds” to a turnover-based apportionment.
The proposal reflects recent Supreme Administrative Court case law recognizing a taxpayer’s right, under the VAT Directive, to use turnover to determine deductible input VAT.
Separate rules would apply where more accurate: allocation by area for VAT on goods/services used for buildings, and special exclusions for certain financial activities.
If a business has multiple lines, a separate turnover ratio would apply for each line of business.
The deductible proportion would be calculated annually, rounded up to the nearest whole number generally, or to two decimals for line-of-business and certain financial activity calculations; the changes are intended to apply from 1 January 2027.

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.