Sweden Floats New VAT Deduction Rules for Mixed Activities

Sweden is seeking feedback on a proposal to formalize turnover as the main basis for allocating value-added tax deductions in businesses with both taxable and exempt activities.

The proposal would also allow for alternative allocation methods where they provide a more accurate picture of the extent to which purchased goods and services are used in taxable transactions, under a consultation published by the Swedish Ministry of Finance on Thursday.

It would additionally enshrine safeguards against abuse of the turnover basis in related-party transactions.

• Businesses with mixed activities — such as financial firms or ...