The Swedish Court recently changed a ruling from the Council of Advance Tax Rulings (the “Council”) where the Council had held that a company had the right to repayment of input VAT relating to costs for services provided to a company in Luxembourg, even where such services were not subject to VAT in Luxembourg.
The Court held in its ruling that in order for VAT to be repayable in respect of turnover within the EU, the turnover must be subject to VAT in the state in which it takes place, as well as in Sweden. Since the turnover in question was not subject to VAT in Luxembourg, the Court found it clear that no input VAT could be repaid. The Court further stated that the Swedish requirement that the turnover is subject to VAT in both Member States is in line with EU law.
Source Linklaters
