Sweden sets a SEK 120,000 small-business VAT exemption and opens it to EU businesses from 2025

What changed in detail

SFS 2024:942, the Act amending the VAT Act (mervärdesskattelagen, 2023:200), was issued on 24 October 2024 and published on 29 October 2024. It repeals chapter 18 of the VAT Act and replaces it with a new chapter 18 that implements Council Directive (EU) 2020/285 on the special scheme for small enterprises. The Act enters into force on 1 January 2025.

Under the new chapter 18, section 4, supplies of goods and services within Sweden are exempt from VAT when made by a taxable person whose annual turnover within Sweden does not exceed SEK 120,000 in the calendar year and did not exceed SEK 120,000 in either of the two preceding calendar years. Section 3 defines annual turnover within the EU as the value, excluding VAT, of the supplies a taxable person makes in the EU in a calendar year.

Section 5 adds two conditions for a taxable person established in another EU Member State: it must be identified for the scheme in that state under rules corresponding to art. 284(3) of the VAT Directive, and its annual turnover within the EU must not exceed EUR 100,000 in the calendar year or in the preceding calendar year. Section 11 deals with the position once Swedish turnover goes above SEK 120,000 during the year.

What it means

The rule is still in force: the consolidated VAT Act still carries chapter 18, section 4 in the wording set by SFS 2024:942, and no later change to the SEK 120,000 figure has been recorded. Two points are easy to miss. The test looks back two years, so a business that exceeded SEK 120,000 in either of the two previous years cannot use the exemption even if this year’s turnover is lower. And the exemption is no longer purely domestic: an SME established elsewhere in the EU can supply in Sweden without registering for Swedish VAT, provided it stays within the EUR 100,000 Union cap and has notified its home tax authority.