On January 1, 2025, amendments to the Swedish Tax Procedure Act (“SFL”) came into force, introducing stricter criteria for companies seeking or maintaining approval for Swedish F-tax. These changes grant the Swedish Tax Agency (Skatteverket) enhanced tools to deny or revoke F-tax status for businesses that fail to meet specified obligations.
What is Swedish F-tax?
In Sweden, both domestic and foreign companies providing services within Sweden are required to obtain approval for F-tax. Without this approval, the payer of a company’s invoice is obligated to withhold 30% of the payment as preliminary tax, i.e. transfer it to the Swedish Tax Agency. This withholding effectively leaves the service provider with only 70% of the invoiced amount, a scenario that can cause significant operational and financial challenges for the service-providing company. The F-tax is also mandatory to obtain ID06 cards, used at Swedish construction sites.
To secure F-tax approval—and thus avoid tax withholding—a company must meet several requirements. Additionally, businesses holding F-tax approval are obligated to annually submit “Specific Information,” a simplified version of a tax return, to the Swedish Tax Agency.
Key Changes to F-tax Rules
The legislative amendments that took effect on January 1, 2025, have the following implications:
Requirement to Submit "Specific Information": Under previous legislation, Skatteverket could not deny a company F-tax registration solely because the company had failed to submit “specific information,” even if the agency had requested it. With the new rules, Skatteverket can now deny F-tax registration if a company fails to comply with such requests. Furthermore, the agency has the authority to revoke an existing F-tax approval for the same reason.
Non-Compliance with Green Technology Tax Credits: Applications for F-tax may now also be denied if a company fails to comply with decisions requiring the repayment of tax reductions related to green technology incentives, such as those for the installation of solar panels or electric vehicle charging stations. Similarly, Skatteverket can revoke a company’s F-tax status for non-compliance with such repayment obligations.
When Do the F-tax Changes Apply?
The changes to the F-tax rules primarily come into effect on January 1, 2025. However, the amendments regarding the submission of "specific information" will not apply to any such obligations that arose before this date. Similarly, the new provisions concerning the repayment of tax reductions for green technology, such as solar panel installations or electric vehicle charging stations, will only apply to decisions made after January 1, 2025. Any prior obligations or decisions will remain subject to the old rules.
Conclusion and Practical Implications
The stricter F-tax rules, effective January 1, 2025, increase compliance obligations and give the Swedish Tax Agency greater enforcement powers. Businesses must ensure timely submission of "specific information" and to comply with tax decisions to avoid deregistration or withholding problems. Proactive compliance with the Tax Agency is now critical.
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