Swedish tax rules requires non-Swedish companies with presence in Sweden to register for either F-tax, or to hold a withholding exemption decision. If the non-Swedish company does not have either of this, payments from the non-Swedish company's customers in Sweden will be subject to 30 % withholding. This means that only 70 % of an invoice for services performed in Sweden will be paid. Remaining 30 % will go to the Swedish Tax Agency.
Accordingly, a non-Swedish company should register for F-tax, or get a withholding exemption decision as soon as possible. There are some major advantages with going for the witholding exemption decision. In this article, however, we will focus on the processing times of an F-tax application, compared to an application for withholding exemption decision.
Processing times for F-tax application
The processing times for F-tax applications vary throughout the year. However, in general, it will take at least two weeks for the Swedish Tax Agency to process an application. If the application is not complete, or there are questionmarks arising when processing it, which is generally the case if a tax consultant is not the person preparing the application, the processing can be delayed with multiple weeks.
Currently, the processing time is 4 weeks for an F-tax application. This is a considerable amount of time, which can lead to payments being paused until the registration for F-tax is approved and complete.
Therefore, it is recommended that a tax consultant is engaged for the drafting and filing of the F-tax application. Also, make sure that you begin the process in due time before your project in Sweden starts.
Processing times for withholding exemption decision application
As said above, there are multiple advantages with opting for a withholding exemption decision instead of F-tax. The primary reason is that a company will not be obligated to file a light-weight Swedish tax return, if going for an withholding exemption decision.
Other advantages, is that the processing times of the Swedish Tax Agency are generally substantially more quick, compared to F-tax. Currently, the processing time for a withholding exemption decision application is around 1-2 weeks.
Therefore, from a time perspective, withholding exemption decision application is more favorable over F-tax application.
However, if a company intends to have multiple clients in Sweden, over a longer time period, it is likely that F-tax would be more beneficial. The company's unique situation has to be considered when opting on F-tax or withholding exemption decision. Please reach out to us, if you would like to discuss this issue.
Conclusion
A F-tax application's processing time is at least 4 weeks.
A withholding exemption decision application's processing time is 1-2 weeks.
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