On 1 July, 2017, the taxing provisions for Sweden’s new Chemical Tax on white goods and other electrical goods (such as computers, tablets, televisions, phones, games consoles and routers) will come into effect. With only 30 working days remaining, a key consideration at this stage is whether to take the available option to register as a warehouser.
On 1 July the taxing provisions for Sweden’s new Chemical Tax on white goods and other electrical goods (such as computers, tablets, televisions, phones, games consoles and routers) will come into effect. Chemical Tax will be due from any business that manufactures in Sweden, or brings in-scope goods into Sweden from elsewhere in the EU, or from outside the EU via import. Therefore the impact will be very broad – for example, any Swedish business that buys computers from an EU supplier is likely to be required to report and pay Chemical Tax.
Warehouser application effective from date at which fully processed
With only 30 working days remaining, a key consideration at this stage is whether to take the available option to register as a warehouser. In this regard, it is important to note that the Swedish Tax Authority (“STA”) has confirmed that warehouser applications will take effect from the date at which the relevant application has been fully processed (and not the date of submission). Given the large number of businesses impacted, it is likely that the Swedish Tax Authority will be receiving a large number of applications in the coming weeks. Therefore any business wishes to be registered as a warehouser from the 1 July should submit is application as soon as possible to help ensure that it is processed in time.
Businesses that have non-Swedish directors or owners should be aware that they will be required to submit additional documentation in support of any warehouser application. This may lead to additional administration and/ or delays in completing the application.
STA is incentivizing warehouser registration
A Chemical Tax warehouser registration is optional, and in principle is available to any business that is liable to report and pay the tax. At first look there are a number of advantages to registering as a warehouser. Warehousers in general will pay Chemical Tax later (due to the different tax accounting points applicable) and will operate monthly reporting (as opposed to the 5 day reporting for non-warehousers).
However, depending on a business’s flows of in-scope goods, warehousing may also entail certain disadvantages. For example, warehousers may take on the payment and reporting responsibility in respect of purchases of in-scope goods from other warehousers. This can lead to significant additional administration. A warehouser registration may also bring stock held on 1 July 2017 within the scope of Chemical Tax, due to the different tax accounting points applicable.
During the course of KPMG’s informal discussions with the STA over the last few months, it is our observation that the STA is effectively incentivizing warehouser registration. Firstly, the STA has decided not to create an electronic portal for non-warehouser Chemical Tax returns, and has indicated that there are no current plans to create one. As a consequence all 5 day declarations should be in paper form and signed by an authorized signatory. The STA has also confirmed that, in line with legislative provisions, it will not accept power of attorney for Chemical Tax returns. A number of clients have indicated to us that the practical challenges of meeting this reporting requirement effectively rule out the possibility to report Chemical Tax as a non-warehouser.
Time to make a decision
If your business will be required to report Chemical Tax we recommend that the warehouser option is considered in detail based on the specific business flows, as soon as possible. Our current experience is that warehouser registrations are taking a couple of weeks, however, this processing time is likely to increase as the volumes of applications increase. Businesses looking to be registered as a warehouser on 1 July, should aim to submit their applications as early as possible and at the latest by the first week of June.
Please visit KPMG's portal for the Swedish Chemical Tax for more information.
+46 8 723 96 98