Since new rules were introduced in Sweden during 2021, non-Swedish businesses that sends invoices for services conducted in Sweden need either to be approved for Swedish F-tax, or hold a witholding exemption decision. If not, only 70 % of the invoices will be paid (30 % withheld). It usually takes more than one year to get back the withheld amount, and it involves legal argumentation with Tax Agency.
What is Swedish F-tax?
For many years, the standard procedure has been to go for the F-tax approval. There are some advantages with this, if your business has multiple clients in Sweden. The reason for this is that the F-tax is valid in relation to all receivers of a non-Swedish business' invoices.
On the other hand, the Swedish F-tax registration brings some unwanted administrative obligations with it. A major one is the obligation to file so-called "specific information", which has to be done every year the F-tax registration is valid. The "specific information" is somewhat of a light tax return, which has the purpose of providing the Swedish Tax Agency with information to decide whether a non-Swedish business has a taxable presence (a permanent establishment) in Sweden.
What is a Withholding Exemption Decision?
There is no obligation to file "specific information" if one instead applies for a withholding exemption decision. Therefore, the team at TaxHelpSweden tend to recommend non-Swedish businesses to go for the withholding exemption.
However, a negative aspect with this is that there is no public form available to apply for a withholding exemption. If you let TaxHelpSweden perpare the application for you, this is not a problem though. Also, our fee for preparing a withholding exemption application is generally less than the fee for preparing a F-tax application.
All clear now? Probably not. There are many factors to consider, when opting for either F-tax or withholding exemption. Please do not hestitate to reach out to us, in order to find the best solution possible for your business.
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