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Sweden: Proposed expansion of chemical tax to business-to-consumer sales

Sweden: Proposed expansion of chemical tax

A proposal to expand the ”chemical tax” would, if enacted, impose the tax on sales and transactions between foreign companies and individual consumers in Sweden. The proposal would have an effective date of 1 October 2020.

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The Swedish chemical tax applies with regard to certain electronical products and ”white goods,” and is imposed on any business that manufactures ”in-scope goods” in Sweden or that brings and imports in-scope goods into Sweden from elsewhere (in the European Union or or from outside the EU). There is an option to register as a warehouser (lagerhållare) that may shift the responsibility for chemical tax liabiltiy further down the supply chain. However, in-scope goods delivered from a foreign country directly to a private individual in Sweden are currently exempt from the chemical tax.
 

Proposed expanded scope of chemical tax on electronical products and white goods

The proposed change would remove the exemption for in-scope goods sold directly to Swedish customers (business-to-consumer (B2C)). The aim of the proposal would be to address possible distortion of competition between Swedish and foreign companies. The expansion would affect foreign companies that sell in-scope goods to Swedish consumers.

Within the EU, the chemcial tax would be due only when the company’s sale of in-scope goods exceeds SEK 100,000 during the present or previous year.

”Intermediate companies” might be affected by the expanded scope if:

  • They are professionally involved with assisting in distance selling procedures
  • The seller of the product is not seen as a taxable company and 
  • The total value of in-scope goods handled via the intermediate company’s exceeds 100,000 SEK during present or previous year.

Typical intermediate companies are those that allow for purchases directly from a foreign company via an app or a webpage. Price comparison webpages or search engines that do not offer any actual sales without completing the sale via a webpage would not be deemed to be intermediate companies, nor would parties that act only as intermediates regarding the actual payment between sellers and buyers.

The proposal would allow companies to register as a registered EU-merchant (registrerad EU-handlare) in order to report the tax on a monthly basis rather than five days after the date of delivery of in-scope goods.


KPMG observation

The chemical tax was criticized by certain businesses when the tax was first implemented, and some companies moved their storage abroad in order to claim the exemption. Entities consulted on the proposed expansion have agreed that the chemical tax rules need to treat foreign companies equally as they do Swedish companies. There are still those that question the tax, and assert that this type of tax (or any ”green tax”) must be addressed on the EU level. Foreign companies that sell electronical products or white goods to Swedish customers need to consider this planned expansion of the tax.
 

For more information, contact a KPMG tax professional in Sweden:

Joachim Broberg | +46 8 723 97 82 | joachim.broberg@kpmg.se

Josefin Knutsson | +46 8 723 94 96 | josefin.knutsson@kpmg.se
 

Read an April 2020 report prepared by the KPMG member firm in Sweden

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