A 25% value-added tax (VAT) is generally levied on the turnover of taxable goods or services in commercial activities within Sweden. The rate is 12% for passenger transportation, hotel services and food. The rate is 6% for newspapers and cinema. Taxable goods and services include all forms of energy such as electric power, oil and gas; commercial radio and television programmes; telephone services; guest artist appearances; sporting events; and personal services such as a beautician's services, legal services, financial and administrative consulting, and certain imported services.

Certain goods and services are exempt from VAT, such as medical and dental services; educational services; bank and financing services (but not financial consulting services); insurance services; aircraft fuel; and theatre, opera and ballet performances.

Entities liable to pay tax that have taxable turnover in a fiscal year in excess of SEK 1 000,000 must register with the VAT department of the county tax authority in the county of residence. If taxable turnover is SEK 1 000,000 or less, VAT must be reported in a separate section of the entity's income tax return.

VAT returns are generally filed monthly. They are due on the fifth day of the second month after the expiration of the monthly accounting period. The VAT returns for entities with a taxable turnover that exceeds SEK 40 000,000 in a fiscal year are due on the twentieth day of the first month after the expiration of the monthly accounting period.

The contents of this article are intended as a general guide to the subject matter. Specialist advice should be sought for your specific circumstances.

For further information contact Per Snellman on Tel: +468 613 9000 0r Fax: +468 791 7511; or enter a text search 'Ernst & Young' and 'Business Monitor'.