Sweden scraps VAT group benefits

Mon 5th Oct 2015

The allowance for group VAT locking in Sweden is to be abolished at the start of 2016.

The allowance permits group companies to transfer the right to deduct input VAT incurred on certain expenses. The European Commission had attempted to force Sweden to withdraw its entire VAT Grouping arrangements on the basis that it favoured the financial services industry. However, it failed, and so the Swedish authorities have decided to only remove this element.

The measure to withdraw VAT locking is contained within the 2016 Swedish budget, now with parliament.