In mid September this year the Government presented a proposal concerning VAT and the cultural sector such as theatre, concerts, opera, circus and literary works. The proposal also includes changes to the exemption for education. The proposed changes are a consequence of the Swedish membership of the EC. The effect will be that certain areas will no longer be exempt from VAT. The tax rate for most of this supplies is proposed to be 6 %. The proposed changes will enter into force, decision is expected in mid December 1996, on January 1, 1997. In short the following supplies will no longer be exempt.

  • education services will normally be seen as taxable supplies except for traditional education such as nine-year compulsory school, upper secondary school and university
  • granting or transfer of the right to works of art and literary works
  • granting or transfer of the right to sound or picture production of an artists performance, the performance itself made by the artist will still be exempt though
  • entrance fees for concerts, circus, opera, theatre, sports events and sport centres will no longer be exempt. The deduction for input VAT will be restricted if the enterprise has been financed by public funds. The exemption for sports will, however, still be applicable when supplied by the public and non-profit organisations. Tennis-schools, ski schools and similar will be included in the concept "sport".
  • library- and museum activity will be taxable if not supported by the public authorities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Per Snellman on tel: +468 613 9000, fax: +468 791 7511, e-mail: per.snellman@ey.se or enter a text search 'Ernst & Young' and 'Business Monitor'.