Sweden: Updated guidance on application of VAT to asset transfers as part of business transfers
Updated guidance effective September 30, 2025
The government issued updated guidance on the application of value added tax (VAT) to assets transfers that are part of business transfers, and revoked its prior positions on such transfers effective September 30, 2025.
Under the updated guidance, in order for a transfer of assets in the form of a business transfer to be VAT-exempt under Chapter 5, Section 38 of the VAT law, VAT must be otherwise chargeable on the transfer of the assets and such VAT must be deductible by the recipient of the assets.
KPMG observation
The updated guidance will negatively affect the ability of taxpayers to transfer entire/parts of businesses in a VAT-neutral manner in the future. Not being able to apply Chapter 5, Section 38 of the VAT law means that taxpayers in restructurings and mergers will need to analyze which assets (goods and services) are transferred, determine the price for these assets, and whether the assets are subject to VAT or exempt from VAT. In the case of intra-group restructurings, the revaluation rules may also need to be taken into account, and for certain types of assets, the adjustment rules may also need to be considered. In addition, since Chapter 5, Section 38 of the VAT law now requires that output VAT be charged upon the transfer, transactions in which only VAT-exempt assets are transferred (e.g., real estate) will no longer be covered by the provision.
Read an October 2025 report (Swedish) prepared by the KPMG member firm in Sweden