Sweden VAT reclaims for non-resident businesses

Tue 18th Dec 2012

Two court cases relating to the right to foreign companies to reclaim VAT through the EU VAT recovery mechanism have been reviewed.

In both cases, the Swedish tax authorities deemed the foreign claimants to have Swedish residency, and therefore not entitled to use the European Union 8th VAT Directive mechanism for reclaiming Swedish VAT.

In the first case, the tax authorities claimed that the company (Daimler) regularly sent staff to Sweden for events.  However, the tax court ruled that this did not constitute a fixed establishment, or that transactions were being undertaken there.

In the second case, there was a dispute on what constituted a ‘transaction’.  It confirmed that a transaction must be an output (sale).