New Value Added Tax Act
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
S considers that the new value-added tax law makes the legislation more transparent and adapted to the EU's directives 1, but wants the exemption not to become too restrictive 1. V argues that the changes are not sufficient as the internal VAT consumes the economy of the association life 2. SD considers that the VAT system should be simple with a broad VAT base 3 and that the new law makes the regulation more easy to understand 3. C argues that Sweden over-implements EU directives and demands an investigation 4. M emphasizes that the law shall simplify the regulation and reduce the administrative burden 5. MP wants to give civil society better conditions through reduced red tape 6. KD considers that the law makes the regulation easy to apply 7. L wants to reduce the regulatory burden for companies 8.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Ida Ekeroth Clausson (S)
Madam Speaker! Today we are considering the Committee on Taxation's report SkU10 New Value Added Tax Act.
The main task of the tax system is to ensure tax revenues that are to finance the welfare. In addition to this, the tax system shall contribute to redistribution, equality, and equity. For the system to be fair and have trust among the citizens, it is important with general rules with broad tax bases and not least that the level of the taxes is well-balanced against the goals for the economic policy and the ambitions for the welfare.
Clear rules do not only contribute to understanding and legitimacy for the tax system but also reduce the administrative burden for companies and private individuals. Furthermore, the risk of errors, negligence, and deliberate fraud is reduced if the system is easy to understand.
The current value-added tax legislation has been considered difficult to oversee. Many of the provisions in the current law have been changed, and additions have been made which have resulted in certain provisions becoming unnecessarily extensive. Consequently, the provisions have become difficult to understand and oversee.
In the law, there are several examples of new provisions having been inserted into existing chapters. The Swedish rules have also been changed several times, and new ones have been added. This has collectively made the legislation difficult to understand and consequently also difficult to apply.
In order to make the value added tax legislation more transparent and to adapt the law's rules and concepts to the EU's value added tax directive, the then Social Democratic government appointed an inquiry in 2016 which was tasked with conducting a review of the law. The proposal that we are now to take a position on is therefore a reworking of the current value added tax law that is easier to understand and apply. The new law receives a new structure and a more modern language and has been adapted to the EU rules' concepts and structure.
Madam Speaker! The law therefore means, in addition to becoming more easy to understand, an adaptation to the EU's VAT directive. The new law also clarifies what applies when non-profit organizations sell services internally, which is an important issue that has been particularly raised with the Swedish Tax Agency during our committee meetings.
We Social Democrats share the view in last year's announcement that there have been uncertainties regarding what applies when non-profit associations sell services internally, and that the interpretations that have been made of the legislation have hit many organizations hard financially.
That voluntary associations, such as the sports movement, study associations and registered religious communities, are exempt from the requirement to pay VAT. However, if the service could instead have been purchased on the market, it may be judged that the exemption from VAT leads to a distortion of competition. In such cases, the exemption from VAT may not be applied. The internal sales are then judged to be subject to VAT. We therefore stood behind the announcement to the government to investigate how the issue can be resolved without causing a distortion of competition and without increasing the risk of VAT fraud.
The value added tax directive governs the design of the Swedish value added tax rules and which services shall be taxable or tax-free. A solution to the question of internal value added tax must therefore be compatible with the directive.
Just as is mentioned in the committee's position in the report, one must take into account the purpose of Article 132.1 f of the VAT Directive when interpreting the provision, so that the provision does not give such a restrictive interpretation that the exception in practice never becomes possible or loses its effect. It is important that this works. We believe that by adapting the legal text to the directive, we avoid the Swedish rules being applied more narrowly than the directive's rules and what the EU rules require.
All around in our country, invaluable voluntary efforts are made every day. It is about committed leaders who train youth teams, fellow citizens who support lonely elderly people, study circle leaders who strengthen education, and treasurers who handle the association's accounting in the evening after work. Association life and voluntary organizations make a fantastic contribution, not least in these times of economic crisis.
We share the reservations' view that it is important that we get the issues surrounding internal VAT in order. That we Social Democrats today will not vote yes to the reservations that the issue of internal VAT should be further investigated, which was the tax committee's intention, is because the law will hopefully be interpreted based on what was the tax committee's intention behind the announcement.
If it nevertheless turns out that the Swedish Tax Agency uses a narrower interpretation than the directive allows and even the courts follow that line despite a new legal wording, the Social Democrats will undoubtedly act on the matter by taking a new initiative for a declaration and taking further measures to rectify the problem.
Madam Speaker! With this said, I move for approval of the committee's proposal in the report.
Ilona Szatmári Waldau (V)
Madam Speaker! In essence, we are in agreement within the committee regarding the new value-added tax act. I will therefore, in my speech, stick to the part where we are not in agreement.
In the law, certain changes have been made regarding non-profit associations, but it is not sufficient. Non-profit associations and registered religious communities are exempt from income taxation when the business activity aims to contribute to the organization's public benefit purposes.
Civil society's efforts are important and should be supported. Within voluntary activities, thousands of members work for free for various forms of social benefit. Today, problems arise when organizations operate at different levels and contain a number of different legal entities. This can, for example, involve organizations where the national organization is a legal entity and the local branches are their own legal entities. It is common in larger organizations to have systems to internally support local branches. This can involve IT support, administrative help, and other efforts that one chooses to coordinate within the organizations for practical or economic reasons. In recent years, the legal situation has been uncertain as it has been established in various judgments that this way of working involves problems in relation to the so-called competition requirement. These services have then been subject to VAT, despite the exemption, and it has become a form of internal VAT.
The state withdraws millions in VAT from associations, and at the same time, voluntary resources are used for administration instead of for the activities for which the association exists.
Vänsterpartiet motioned for a review of the internal VAT and received support from a unanimous tax committee. We argued, and argue, that it is difficult to see how the internal services would result in a distortion of competition since they are often tailored to the exact activity they operate within and therefore are not on the market. In addition to the problem that the internal VAT would consume a large part of the associations' finances, we believe it is important that the administration that a local non-profit treasurer shall manage is reasonable. Otherwise, we will see a development where fewer people will want to take on assignments, which will ultimately become a problem for how Föreningssverige is structured.
Based on our motion and the Liberals' motion on the same theme, the Riksdag decided almost exactly one year ago that the government shall promptly investigate how the issue of internal value-added tax between associations within the same organization can be resolved without causing a distortion of competition in violation of EU law and without increasing the risk of fraud with the value-added tax system.
In the bill on the new value-added tax act that we are to decide on today, the government argues that this announcement is fulfilled, because in the proposal in the act on how the legislation regarding value-added tax shall be adapted to the EU directive, this has been achieved by adapting the legal text according to the Danish example. We can observe that no investigation has actually been conducted, but that the bill describes the different judgments that exist in the area and how one could proceed in order not to limit the possibility of exemptions for the voluntary sector.
The competition requirement, as it is expressed in Swedish law, has resulted in that the exception for the provision of internal services in practice has not been able to be applied. The strict application has meant that the exception has become more limited and thus yields a different result than the corresponding provision in the EU's value-added tax directive.
The Government has now, in the bill, proposed a change to the competition requirement. The change means that exemptions from tax liability can be granted provided that the exemption "cannot be expected to cause distortion of competition." How this new wording is to be interpreted is unclear. The application still risks becoming too restrictive.
Against this background, it should be decisive for the possibility of applying the exemption instead that there is no real risk of distortion of competition.
The competition requirement should therefore be supplemented in such a way that it clearly appears from the legal text that the exception can be applied provided that no actual distortion of competition occurs.
This was what the Left Party's follow-up motion in this matter was about. We can, however, state that we were alone in having this motion. The Green Party and the Centre Party argued in a proposal for an announcement that a new investigation needed to be carried out.
We want the same thing, and we have therefore agreed on a joint reservation which means that the government should investigate the issue and ensure that we truly get neutral legislation that ensures that associations do not need to pay the so-called internal VAT.
There are great fears within the voluntary sector and also within Vänsterpartiet. There are also fears within the Socialdemokraterna, as we heard. Even though they do not want to stand behind our reservation, they still show that they have fears regarding this and hope that Skatteverket will handle this in a good way and thus also that the courts will reach good decisions.
We in Vänsterpartiet do not want to wait and see. We want to be sure that we get legislation that ensures that associations do not get caught in the crossfire when it comes to VAT issues.
Eric Westroth (SD)
Madam Speaker! Today we are debating a new value-added tax law proposed to enter into force on July 1 this year.
The value-added tax, or VAT as we usually call it, is a consumption-based tax that is added to goods and services at every stage of transaction and sale.
The history of moms in Sweden began as early as the beginning of the Second World War to finance the increased costs of defense. It was then called a general commodity tax, turnover tax or oms in everyday speech, and it was levied at the sale of the product in the final link to the end consumer.
The wealth tax was a temporary tax and was actually abolished at the end of the Second World War. However, it was reintroduced again in 1960 as a consequence of an unbalanced budget, and upon reintroduction, the tax was 4.2 percent.
The turnover tax was, however, replaced in 1969 by the current value-added tax, which meant that the value added in each stage of the transaction was taxed instead of only the final stage, which was the case with the previous turnover tax.
The transition to VAT was then a trend within the so-called EC countries, and Sweden joined in. At the introduction in 1969, the Swedish VAT rate was 11 percent. It has since been successively both increased and broadened to the standard VAT we have today at 25 percent, which is one of the highest VAT rates in the world, even though, in addition to standard VAT and zero-rated VAT, we apply two reduced VAT rates of 12 and 6 percent respectively.
At the end of the 60s, there were fewer than ten countries that had introduced a VAT system. But today, there are more than 160 countries that have done so. The OECD states that VAT in general is a tax with relatively small growth-inhibiting effects, which is desirable when collecting tax.
VAT is primarily a fiscal tax, meaning that it finances the state's expenditures without any actual corresponding counter-performance. VAT is a good tax in the sense that citizens have a certain opportunity to decide how much tax they want to pay by steering their consumption patterns. At the same time, VAT is a blunt steering tool if one wants to use just VAT and different VAT rates to achieve a behavioral change or to favor certain groups.
Madam Speaker! I listened to the Committee on Taxation's debate last night regarding the VAT report with motions from the general motion period. There, several members spoke about the Swedish National Audit Office's report on the reduced VAT on food from 2019 and about how blunt and expensive this method is to benefit the groups it was intended to benefit.
I just want to note for the House and for those members who did not sit on the Committee on Taxation when the relevant report from the Swedish National Audit Office was handled, that the Sweden Democrats were the only party that submitted a follow-up motion in connection with the report with a motion "to appoint an investigation of distribution policy support measures as alternatives to the reduced food VAT". Unfortunately, no other party in the Riksdag supported our motion. But I note from yesterday's debate that the support for our motion would have been greater today.
The Sweden Democrats generally believe that the VAT system should be as simple as possible - that one can broaden the VAT base and at the same time have as few exemptions from the standard VAT as possible and perhaps instead lower the level of the standard VAT.
Madam Speaker! VAT's share of Sweden's tax revenues has increased continuously and amounted to 559.7 billion kronor in 2022, which is nearly half of the state's tax revenues. VAT is therefore an incredibly important tax for the Swedish welfare and our common welfare system.
In that case, the VAT system can often be perceived as difficult to understand and complicated, and it frequently tops many companies' and entrepreneurs' lists of both regulatory burden and administrative burden, since VAT, unlike many other taxes, must be handled for every transaction and every invoice, every day.
That VAT is complicated was illustrated with all desirable clarity during the pandemic. The EU purchased medical supplies from countries to then donate them to other countries, and when the EU bureaucrats considered the VAT handling in these transactions to be complicated, they simply decided to exempt themselves from VAT. It is not companies or entrepreneurs who have that luxury; instead, they are forced daily to wrestle with various VAT challenges with every purchase and every sale, every day.
Madam Speaker! The new Value Added Tax Act, which we are debating today, is a neat little book of nearly 1,000 pages. It is, however, in large parts a reworking of the current Value Added Tax Act in order to make it more easy to understand and easy to apply. It has also received a new structure and been modernized linguistically, while also being adapted to the EU's Value Added Tax Directive.
One of the changes in the law concerns the announcement that the Riksdag directed to the government during the previous mandate period. The turnover of services provided between associations within the same organization, which is usually not subject to VAT, would also not need to be subject to VAT when invoiced within the framework of these collaborations - the so-called internal VAT.
We believe it is obvious that the legislation should, to the greatest extent possible, support the important non-profit associations and their efforts for civil society. They should not have to spend large sums on VAT for services that are collaborated on within the own organization, nor should they be affected by the additional work that VAT management would entail for them.
Madam Speaker! Unfortunately, Sweden has now relinquished large parts of its self-determination regarding VAT to the EU and its bureaucrats, and we have a common regulatory framework to adhere to, namely the so-called VAT Directive. However, in the bill, the Government adapts the so-called competition requirement to the corresponding wording in the VAT Directive and gives it the same wording. This is to avoid that the Swedish provision is interpreted more narrowly than the VAT Directive allows and gives a different result than the corresponding provision in the VAT Directive.
Thus, it also addresses what was pointed out in the letter received from one of the referral bodies – that the Swedish application of the exemption was more limited than for the corresponding exemption in Denmark. The text in the competition requirement will now correspond to a direct translation of the Danish wording. In the interpretation of the provision, account shall also be taken of the purpose of the VAT Directive and of the fact that the provision must not be given such a restrictive interpretation that the exemption in practice never becomes applicable or loses its effect.
Madam Speaker! One could therefore think that the government has done what is expected of it, and we may rather have to await a judicial review of whether the new wording in the Value Added Tax Act and the competition requirement is sufficient to achieve the objective of the exemption from value added tax for independent groups and non-profit associations.
If the outcome of the legal review were to point towards the objective not being achieved or that the provision is again interpreted too narrowly, the Sweden Democrats are not averse to raising this issue again in the committee with the intention of urging the government to reformulate the legal text once more so that non-profit organizations can inter-debate without extra VAT costs and without the additional workload that the organizations could potentially be affected by.
I hereby move for approval of the committee's proposal for a decision.
Helena Vilhelmsson (C)
Madam Speaker! I will also in my speech dwell on the question of the internal VAT because it is actually the only thing that sets us apart in today's debate and bill.
Exactly one year ago today, a unanimous decision was made here in the Riksdag that the issue of internal VAT should be investigated. It was to be done quickly, and the purpose was that the issue should be resolved once and for all, that is, that non-profit organizations should not first receive grants from the state to carry out public-benefit non-profit activities, only to then largely pay back that money in the form of VAT – a quite reasonable and logical thought, everyone thought then. But judge our surprise and disappointment when we now observe that five of the eight parties perhaps do not quite think so anymore.
This issue is long-standing and has been discussed for much longer than a year. People's movement Sweden, including all non-profit organizations, the Swedish Sports Confederation, the Church of Sweden, and Svenskt Näringsliv have worked on the issue for decades because other countries, which are also in the EU, do not have the same rules. There, one does not have to pay internal VAT to the same extent as here in Sweden. But in Bureaucracy Sweden, it unfortunately works like this.
We must remember that the EU's VAT Directive specifies a kind of minimum level. But in Sweden, we are good at over-implementing directives – we have seen this many times before. That is probably because it is still possible to make different interpretations in different countries, and it is precisely this that we want to move away from.
What we are discussing and voting on today is, therefore, a new momslag in Sweden. The law needed to be modernized and simplified after much patching and repairing over many years. Adjustments have been made to EU legislation. Good so - it was really needed.
The process with the new VAT law coincided with the work and the public opinion against the unfortunate internal VAT, not least after a very well-attended seminar that the Center Party organized here in the Riksdag a year ago. This led to these two processes merging, and all parties eventually agreed on an announcement.
What happened next, then? Well, during the work on the new VAT Act, they changed, as mentioned, the wording regarding internal VAT so that the provision is the same as in EU legislation. Fine, they thought.
No special investigation has been conducted, in our view. No one found out why Denmark has different rules for associations than Sweden. This becomes even stranger when we then find out in the committee that the Swedish Tax Agency will not make any different assessment than before. They have, in fact, already taken the EU's VAT directive into account in all decisions. The strange thing is that the criteria or requirements mentioned are, of course, the same in Sweden and other EU countries, and yet, for example, trade unions and other associations in Denmark have an exemption from paying VAT.
I have, as a one-year anniversary, enjoyed reading some quotes from the debate a year ago, when the government at that time suggested that the issue should not be investigated, despite the Riksdag's decision.
"It is astonishing if these figures are correct. It was a sharply formulated announcement from the Riksdag and the government cannot ignore it. [.] That they should be so arrogant towards an elected Riksdag sounds incredibly nonchalant," said the Liberal member Gulan Avci.
Malin Danielsson from Liberalerna said: I am extremely pleased that the government heeded the announcement made based on my and several others' motions. It is a step in the right direction. Now it remains to be seen if it is sufficient. We will follow the practice and will not let the issue drop.
Hampus Hagman from KD was eager for a separate investigation and asked a question to the Minister for Finance: "The question is very important for many of Sweden's non-profit organizations. Today's internal VAT, that is, VAT on internal services, entails both costs and administration for the organization. Just as the committee points out in the report, this hinders the non-profit sector, the people's movements, and civil society's activities. [.] When does the government intend to appoint the investigation on internal VAT?"
The Swedish Tax Agency informed the Committee on Taxation that the exemption should not be so difficult to implement that it can never be used. The government and the Social Democrats obviously think so too, as they leave it to the courts to judge if disputes arise – just as is today. What kind of view is that? What kind of legal certainty is that for the non-profit sector? Is it not better to go into depth so that it is established once and for all what may be exempt from VAT and what not?
Furthermore, it is not certain that court cases, unless they go all the way up to the Supreme Administrative Court, are generally useful. Svenskt Näringsliv, for example, argues that we must get down to which individual services it concerns to obtain proper guidance. The legal text may suffice, but it is the interpretation that does not land correctly.
We mean that it is precisely this that an investigation should look at and answer. It concerns, for example, what the different chanceries look like, which services the different associations share, and which services more concretely can be covered without internal VAT - precisely the kind of things that are done in all investigations. I think that the Ministry of Social Affairs could afford to do that.
The Swedish Tax Agency further argues that finance and IT services in preparatory works and judgments are not linked to the unique activities that the non-profit organizations conduct and that they therefore cannot be exempted. It is very strange, because regardless of whether you are involved in pottery, children's sports, or any other activity, you must have finance and IT support to run it. For the non-profit organizations at the national level, it is more efficient and cheaper to share these services than to go out and procure them.
But no – the question does not need to be investigated in Sweden. Social Minister Jakob Forssmed argues instead that the government is responding to what the Riksdag requested and said earlier this year: "We want associations and organizations to be able to engage in their important work and not be unnecessarily affected by VAT when sharing certain types of services."
Still, that is precisely what will be the consequence of the bill we are discussing today. It seems as if the government and the Social Democrats, in this matter, think that all public power originates from the Swedish Tax Agency. If the Swedish Tax Agency does not think the bill should be interpreted as the Riksdag wants, well, then that is how it is.
I believe that all power should emanate precisely from this chamber and that the government should do what the Riksdag decides, namely investigate the issue of internal VAT. I move for approval of the reservation.
Marie Nicholson (M)
Madam Speaker! Thank you for the opportunity to once again be able to speak completely unhindered for several minutes about VAT! I am never allowed to do that at home.
The value-added tax legislation that we use today entered into force in 1994 and has since been changed a lot. A modernized value-added tax directive has, for example, been adopted at the EU level. Swedish rules have been changed several times, and new rules have been added. This has resulted in a high degree of complexity in the legislation, and it has become difficult to apply.
The bill we have before us today concerns a new VAT law. The proposed law is a reworking of the current law in order to make the regulation more easy to understand and easy to apply. The new law receives a new structure, is modernized linguistically, and is also adapted to the VAT directive's concepts, structure, and systematics.
The rules in the tax area should be simple and clear, and they should limit the administrative burden for companies. The new law will be better able to meet such a simple goal. That is, in fact, all that needs to be said about that part.
It is an area that we have, of course, heard very much about already, and I will therefore keep my contribution here today somewhat shorter. It is an area where changes are proposed to meet the Riksdag's announcement regarding internal VAT in competition requirements.
Non-profit associations shall be exempt from taxation, but for example within sports organizations there are sometimes several legal entities that assist each other with services that it is difficult for each individual association to provide itself. These can be services such as for example administration, finance and IT. It is the Riksdag's intention, according to the announcement, that such internal services shall not be subject to VAT.
In the current VAT legislation, the competition requirement is designed as a rule of thumb, and VAT exemption is applied only to services that are not provided by anyone else outside the group. In the new VAT legislation, which we are therefore going to make a decision on today, the legal text has been changed to be identical to the corresponding provision in the EU VAT Directive. The text now reads instead that the service is VAT exempt "provided that the exemption is not expected to cause distortion of competition".
This does not mean that the internally invoiced VAT for non-profit organizations automatically disappears, and the Swedish Tax Agency has also confirmed that it actually, for the most part, does not change their interpretation of the legislation. However, it does open up a greater possibility of obtaining exemptions in individual cases. This needs to be tested.
In Denmark, which is often cited as a good example, the exceptions have been tested in several individual cases and success has been achieved, for example by proving that a certain service would have been purchased internally regardless of whether it was subject to VAT or not. That is to say, no company has been disadvantaged by a service being traded VAT-free within the group.
We are here in the chamber mostly or entirely in agreement on the intention of the changed wording, but just as with all legislation, the concrete meaning in the individual case will be decided in the application of the law.
Vänsterpartiet says that they do not want to wait and see. But an investigation is not carried out in a hurry either. Even after that, the legislation may need to be tested, and in the meantime, the money is ticking away. Therefore, I move for approval of the committee's proposal today, Madam Speaker.
Marielle Lahti (MP)
Madam Speaker! I also intended to dwell on internal VAT. Why do I want to speak about this now when we have such an exciting topic, a new value-added tax law, as the previous speaker said? Yes, because I am fundamentally a true association person. I am the kind of person who has been a coach, referee, and player in the women's team – floorball was my sport – and I have participated actively in board work and so on.
All of us who have done it know that it means bingo nights, hot dog sales, and whatever it is. It was great fun! My children have for the most part grown up in the sports hall or in the meeting room. That is how it looked. Association life is a very important contribution to Swedish infrastructure and consists largely of passionate people who work voluntarily to make the world a little better, for example within sports where I myself was active.
In this association life where one gives so much of oneself and one's time, I believe one does not need unnecessary obstacles in the operations. One does not need rules that make one start to become worried about how to administer internal VAT. It becomes completely absurd in this context, if I am to be completely honest, and leads to an enormous legal uncertainty.
I mean that politics has a responsibility to make it as easy as possible for people to give their time and their energy to the common good. Sweden's popular movements contribute to democracy, public health, integration, premises to meet in, a rich cultural life and a meaningful leisure time for children and young people, to mention a few examples.
In civil society, people from diverse backgrounds and circumstances meet and get the opportunity to grow and improve their local community, while simultaneously practicing democratic decision-making. When one starts with floorball, one suddenly finds oneself in statutes, and then it just rolls on.
Miljöpartiet wants to provide civil society organizations with even better conditions through strengthened and long-term support, clear and sharpened democratic conditions and reduced red tape, all to release the power that is created when people work together for the common good.
And then we come to the internal VAT. As we have heard from previous speakers, this concerns a new value-added tax act, and we are talking about something called the competition requirement.
It is about an exception for the provision of internal services and that, in practice, one has not been able to apply this exception for these internal services.
Regardless of whether the services have been specifically adapted for certain operations or have required specialist competence for execution, the assessment has been that if equivalent services could have been provided by others outside the independent group, the criteria for applying the exception have not been met. It has really not hit the mark at all.
Against this background, there is now a change of the competition requirement, which we will decide on later this afternoon. But we believe that the change of the wording unfortunately can have the same effect, i.e., a very restrictive application.
Associations are also concerned. Among others, Riksidrottsförbundet has said that it is not clear how the new wording is to be interpreted. Will there be any change at all to the possibility of applying the exception? That is not known. A great uncertainty is felt, and that is bad. The provision of internal services within the independent group could be feared to cause a distortion of competition, even though in reality no such risk exists.
The Government has, in its assessment, concluded that there is no basis to make further adaptations of the provisions of the directive in this legislative matter.
Miljöpartiet shares the associations' and the Swedish Sports Confederation's concern and wants to highlight a proposal that the Swedish Sports Confederation has developed. It is said that one alternative could be to reformulate the competition requirement from "cannot be expected to cause distortion of competition" to "that an application of the exemption does not entail a real risk of distortion of competition".
We are concerned that the bill, if it passes in its current form, fails associations regarding the internal VAT. Therefore, adjustments need to be made that take both previous announcements and the situation of association life seriously.
It is not good that the question of internal VAT should be so complicated that it needs to be decided in a legal instance.
Furthermore, I agree with one of the previous speakers. I was myself present at the meeting when Skatteverket said that they experience that this does not affect the assessment they have made until now and that it will not have any impact on current practice.
This gives cause for concern, and therefore I move for approval of the joint reservation.
Cecilia Engström (KD)
Madam Speaker! A new Value Added Tax Act replaces the current Value Added Tax Act. The proposed law is a revision intended to make the regulation more easy to understand and easy to apply, something that is appreciated by Sweden's entrepreneurs. The new law receives a new structure, more modern language, and is adapted to the EU's Value Added Tax Directive with concepts, structure, and systematicity. It is good and long-awaited by all who are to interpret the law.
Madam Speaker! The most important change being made in connection with the new law is the clarification regarding exemptions from tax liability for services within the non-profit sector, the so-called internal VAT.
We Christian Democrats have always highlighted the non-profit sector and association life as an important part of our society and a fundamental part of our democracy. Civil society makes a fantastic contribution on a voluntary basis. It can be football or floorball practice, help for the homeless, homework help or adult education - all for a public benefit purpose. The conditions for this should, of course, be the best.
Madam Speaker! The voluntary services of civil society that are directly necessary to carry out the operations shall be exempt from VAT, provided that it does not cause a distortion of competition. This concerns services that are provided exclusively within the own organization and are tailored to the needs that exist there, for example, membership registers, IT support, administrative help, and other efforts that, for practical and economic reasons, one chooses to coordinate within the organizations. The purpose is that those who are active within the organization at the local level should be able to devote their time and energy to the association's main purpose rather than to administration.
As we have heard, the Riksdag made an announcement to investigate how the issue of internal value-added tax between associations within the same organization can be resolved. This has now been done, even though it was not a formal investigation.
We take the concerns of the voluntary sector seriously, and the legal text has now been clarified and has exactly the same wording as the EU directive. By adapting the legal text to the directive, it is avoided that the Swedish rules are applied more narrowly than the directive's rules. Through these changes, the Swedish law has the same wording as the Danish law and should therefore be able to be interpreted in the same way. The preparatory works have also been changed, so a change has occurred that can have an effect.
We also emphasize that the provision must not be given such a restrictive interpretation that the exception in practice almost never becomes applicable and thus loses its effect.
Madam Speaker! I vote in favor of the committee's proposal and against the reservation.
Cecilia Rönn (L)
Madam Speaker! The bill proposes a new Value Added Tax Act that replaces the current Value Added Tax Act. The proposed law is a reworking of the current one in order to make the regulation more easy to understand and easy to apply. The new law receives a new structure, is modernized linguistically, and is adapted to the concepts, structure, and systematics of the Value Added Tax Directive.
This is welcome, then, and everything we can do to facilitate for companies to interpret VAT rules, which can be very complex, is important and urgent. Reducing the regulatory burden for companies is a priority.
The Value Added Tax Act is a tax that is intended to be passed forward at every stage to ultimately be paid by the consumer. It is, therefore, a tax that the state collects and which is entirely administered by the companies in our country. The companies administer this on behalf of the state, and then a minimum requirement should be that it is as simple, clear, and uniform as possible.
Madam Speaker! Unfortunately, the new value-added tax law is primarily a simplification and a clarification, which in itself is of course important. But the needs are greater, and the work to make the VAT more uniform and easier to apply must not stall. Therefore, I will continue to push these issues to facilitate things for Sweden's entrepreneurs.
As several of my colleagues have already mentioned, the new value-added tax act contains a change. It is a result of, among other things, my parliamentary colleague Malin Danielsson's 2021 motion on value-added tax on internal services in civil society organizations, which led to an announcement to the government in the spring of 2022.
The announcement stated that the government should promptly investigate how the issue of internal value-added tax between associations within the same organization can be resolved without causing a distortion of competition in conflict with EU law. The report also covers the government's account in the proposition regarding the handling of the announcement.
I took the initiative for the committee to call for the Swedish Tax Agency during the preparation to obtain information from the Swedish Tax Agency regarding the agency's application of the rules for internal value-added tax between associations within the same organization.
Madam Speaker! That is why the new value added tax act now contains the same wording as in the directive's provision so that situations cannot arise where the provision becomes more restrictive and thus yields a different result than the corresponding provision in the value added tax directive. By adapting the legislative text to the directive, it is avoided that the Swedish rules are applied more narrowly than the directive's rules. For groups of associations and other actors carrying out activities of public interest, the provisions will therefore not be able to become more restrictive than what is required according to EU law.
Furthermore, the committee notes that, according to the European Court of Justice's case law on the interpretation of the rules on exemptions in the VAT Directive, account must also be taken of the purpose of the exemption provision and that the provision may not be given such a restrictive interpretation that the exemption in practice is almost never applicable or loses its effect.
This was the intention and purpose of the announcement, and now the Liberals and I will monitor that the purpose becomes what was intended. After conversations with the Swedish Tax Agency at the committee meeting, it was noted that it might not be as simple as it has been stated in the rostrum here before me. Even in Denmark, individual assessments are made, which is something that has been raised in the debate as an example. Therefore, it is now important that one challenges the Swedish Tax Agency's decision in court if one considers the decision to be incorrect. I and the Liberals will also follow this.
Our intention is exactly as my colleague Malin Danielsson wrote in her motion: Liberals safeguard people's voluntary cooperation, outside both the public and the commercial sector. It is what we often call civil society. In civil society, we find the sports movement, folk education, and associations. We want to give all these actors the best conditions to be able to perform their important work for our society.
With that, I move for approval of the committee's proposal.
The deliberation was hereby concluded.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.