On 26 May 2016, the Swedish Tax Agency (‘the STA’) published a new guideline concerning place of supply of services related to admission to cultural, artistic, sporting, scientific, educational, entertainment or similar events, such as fairs and exhibitions, when the purchaser is a taxable person.
As a main rule for taxation of services, a supplier established in Sweden should not charge Swedish VAT on its supply of services when the purchaser is a business established outside of Sweden. In other words, the place of supply for such cross-border services is the purchaser’s country. Some services such as admission to the above listed events that take place in Sweden are, however, subject to Swedish VAT irrespective of where the purchaser’s business is established.
The STA has until now used a rather wide interpretation of what constitutes admission the events where Swedish VAT is due. As a result, foreign companies that organize one-time events in Sweden have been obliged to register for VAT and report Swedish VAT to the STA.
In the STA’s new guideline, the STA states that the provision in the Swedish VAT Act in question should be interpreted restrictively. The aim with the provision is to make it easier for a supplier when the purchaser’s identity is unknown, e.g. when admission is sold to a large number of purchasers. When, however, tickets are sold in such a manner that the supplier is able to determine if the purchaser is a taxable person or not, the abovementioned main rule for the place of supply is, according to the STA, applicable and the supplier should thus not charge Swedish VAT.
If you have any questions about how the guideline may affect your company, do not hesitate to contact us.