Significance of registration in assessing the right to deduct input VAT

2021-10-15 Dnr: 8-1270325
Judgment of the Supreme Administrative Court of 24 September 2021, cases nos. 3562-19 and 3563-19

The Supreme Administrative Court, HFD, has examined the significance of a registration for VAT in the assessment of the right to deduct input tax. According to HFD, the Swedish Tax Agency’s decision on registration is a confirmation that at the time of the decision, the Swedish Tax Agency has assessed that someone is taxable and conducts financial activities. Once the tax liability has been established, it would be contrary to the principles of protection of legitimate expectations and of legal certainty to review this decision retroactively, except in cases of fraud or abuse. Provided that an application has been made in good faith and the applicant has provided the information that the Tax Agency needed to be able to make a decision on registration, the applicant should be able to rely on the tax liability remaining until the authority announces otherwise. Deductions for input tax can therefore not be refused on the grounds that the activity does not meet the conditions for being an economic activity. HFD’s decision provides guidance for the significance of the registration with regard to the right to deduct that is related to the person’s status as a taxable person. The Swedish Tax Agency analyzes HFD’s decision and intends to report on the agency’s assessment of the significance of registration in general for the right to a deduction.

Source: skatteverket.se

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