Sweden Tax Court Issues Advance Notice on VAT Treatment of Auctioning Pledged Goods

The Swedish Tax Court Oct. 11 issued Advance Notice No. 123-23/I, clarifying VAT on auction fees when selling pledged goods on a pawnbroker loan. The taxpayer auctioned pledged goods on defaulted loans and charged fees based when the sale amount exceeded the debt. The taxpayer sought clarification on whether the auction fee was subject to VAT or exempt as a banking and financial service. The Tax Court clarified that the auction fee constituted non-exempt compensation for a VAT-taxable service, because: 1) the sales commission served as compensation for the lender’s services in organizing and executing the sale, which established a ...