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Sweden: VAT treatment of supply between VAT group and branch (referral to CJEU)

Sweden: VAT treatment of supply

The Swedish supreme administrative court on 30 October 2019 announced it is requesting a preliminary ruling from the Court of Justice of the European Union (CJEU) regarding the value added tax (VAT) treatment of supplies from an overseas head office to its branch in Sweden, in a situation when the overseas head office is a member of a VAT group but the Swedish branch is not a member of the VAT group.


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In Sweden, there continues to be uncertainity as to the VAT treatment of supplies between a head office and its branch (combined with VAT groups in or outside of Sweden)—even after the CJEU issued its judgment in the Skandia America Corporation case (C-7/13) and following the issuance of guidance by the Swedish tax agency and other decisions of the Swedish courts.

The current case concerns a bank group having its head office in Denmark and being member of a Danish VAT group. The head office allocates costs for an IT platform to its branch in Sweden (not member of a Swedish VAT group). At issue is whether the branch in Sweden must account for Swedish output VAT on the supplies acquired from the head office. The Swedish supreme administrative court noted the uncertainty with regard to the VAT treatment in this situation, and thus referred the question to the CJEU. Specifically, the question asked of the CJEU is whether a Swedish branch (not member of a Swedish VAT group) can be deemed to be a taxable person when its overseas head office that is a member of a VAT group in another EU Member State, supplies services and allocates costs for these services to the branch.

Read an October 2019 report prepared by the KPMG member firm in Sweden

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