Sweden Tax Court Issues Advance Notice Clarifying VAT Treatment of Employee Wellness Benefits

The Swedish Tax Court July 11 issued Advance Notice No. 17-25/I, clarifying the VAT treatment of employee wellness benefits. The taxpayer, an employer, sought to provide subsidized office massages to its employees, with half the cost, including VAT, compensated by salary deductions and the remainder treated as a tax-free benefit in kind under the Income Tax Act. The taxpayer sought clarification on whether the arrangement would constitute an economic activity under the VAT Act. Upon review, the Tax Court found that: 1) the massages would be performed in return for compensation; 2) the taxpayer would be considered carrying on an ...