Swedish VAT: 25, 12, and 6 percent, what applies to what?

Most people running a business in Sweden run into the question of which VAT rate applies to a given good or service sooner or later. Sweden has three VAT rates in addition to VAT exemption, and applying the wrong rate on an invoice is a common mistake. Here is an overview, always check against the Swedish Tax Agency's current rules or with your accountant for your specific good or service.

25 percent, the standard rate

25 percent is the standard rate and applies to the vast majority of goods and services unless otherwise stated. Most consulting services, IT services, trade services (aside from certain exceptions), and ordinary trade in goods fall under 25 percent VAT.

12 percent

12 percent applies to, among other things, food, restaurant and catering services (excluding alcohol), and hotel and camping operations. Many small businesses in food and hospitality need to keep track of exactly this rate.

6 percent

6 percent applies to, among other things, books, newspapers, and magazines, certain cultural activities such as concerts and museums, and passenger transport, such as taxis, buses, and trains. Many creative and cultural businesses fall under this rate.

Common mistakes

A common mistake is assuming an entire industry always uses the same VAT rate, when reality is often more nuanced, for example a restaurant might charge 12 percent on food but 25 percent on alcoholic drinks on the same invoice. Another mistake is forgetting that a single invoice can need several different VAT rates across different lines, depending on what was sold.

Always confirm your specific situation

VAT rates can change and the boundaries are sometimes complicated. This text is a general overview and does not replace advice about your specific business, always check current rules with the Swedish Tax Agency or ask your accountant.

In FakturaKlar you can set up multiple VAT rates and apply different rates to different lines within the same invoice, so the total and the VAT breakdown are always correct even when an invoice contains goods or services with different VAT rates.