Chemical tax – a new reality for foreign sellers and intermediaries’ sales to Swedish consumers
Foreign companies that sell goods directly to private individuals in Sweden have, for practical reasons, been exempted from chemical tax on certain electronics and white goods. As of 1 October 2020, this exemption will be removed. This means that taxable products, which are sold by non-Swedish sellers and intermediaries to Swedish consumers, will also be covered and taxed.
In 2017, Sweden introduced a tax on chemicals in certain products, namely white goods and other electronics (computers, tablets, televisions, phones, games consoles, routers etc). The tax rate is currently SEK 11 per kg for white goods and SEK 163 per kg for other electronic products. The tax is capped at SEK 448 per product. Deductions may be allowed depending on the chemical content in each product. Under the existing rules, the chemical tax affects businesses that manufacture taxable products in Sweden, bring taxable products into Sweden from another EU-member state or import such products from a state outside the EU. In order to start capturing sales from non-Swedish sellers’, amendments will be made to the already existing Act on taxes on chemicals in certain electronics.
The following new situations will become subject to chemical tax in Sweden and will affect foreign companies from 1 October 2020:
- Sales of taxable products from non-EU-countries made by a foreign seller to consumers in Sweden and delivered by the seller, or on his behalf, from a non-EU-country to the customer in Sweden. Normally, the importer of record will be liable for chemical tax in this situation.
- Sales of taxable products from other EU-countries made by a foreign seller to consumers in Sweden that are delivered by the seller, or on his behalf, from another EU-country to the customer in Sweden. The tax liability arises when the goods are brought into Sweden. Note that the foreign seller becomes liable for chemical tax if the value of its total sales of taxable products to consumers in Sweden exceeds SEK 100,000 during the current or previous calendar year.
- Sales of taxable products made by a foreign seller to Swedish consumers and delivered, by the seller or on his behalf, from another EU-country to the customer in Sweden, even if the foreign seller’s sales of taxable products to Sweden do not exceed SEK 100,000 per year, when such sales are mediated by another party, e.g. an online marketplace. The intermediary is then liable for chemical tax if the total value of mediated taxable products, for which the foreign seller is not liable to tax in Sweden, exceeds SEK 100,000 during the current or previous calendar year.
It should be mentioned that, as a main rule, a chemical tax return on paper is due within five days after each taxable event. However, in order to address companies with frequent reporting, there are possibilities to apply for one of several authorization’s as an approved operator. An approved operator can file monthly returns to report chemical tax.
Companies or suppliers affected by the above-mentioned changes will be able to apply for the authorization as an approved operator from September 1, 2020.
Although the intention behind the changes is to level the playing field between Swedish and foreign sellers, we foresee several challenges for non-Swedish sellers and intermediaries, e.g. in relation to setting up their reporting systems and considering the most relevant authorization for becoming approved operators.
For questions about the extended chemical tax and its impact, such as who will be liable to report the tax; what authorization should be applied for; how can tax liability securely be transferred to consumers that incorrectly states that they make purchases for business purposes (i.e. not as a private individual), etc., Deloitte is here to support you. Please contact us for further information.