In a new position statement (case no.: 8-2338256), the Swedish Tax Agency has changed its view on how VAT should be handled when an employer offers a benefit in exchange for a salary deduction. This affects how we—and you as employers—need to handle VAT for benefit bicycles.
According to the new position statement, the following applies:
- When an employee receives a bicycle as a benefit and has a salary deduction (regardless of whether it is a gross or net salary deduction), this is considered a VAT-liable sale from the employer to the employee.
- This means that the employer must report output VAT on the amount the employee pays through the salary deduction.
- To avoid the Swedish Tax Agency revaluing the amount, the salary deduction should at least correspond to the employer’s cost for the bicycle, including VAT (the VAT calculated through the reverse charge mechanism in connection with invoices from our leasing partner PEAC).
Therefore, as a starting point, we include VAT on the leasing costs when we show what the salary deduction should amount to.
This ensures that the employer:
- fulfills its obligations under the VAT regulations
- avoids the risk of revaluation
- can deduct input VAT on the leasing costs
Our portal guides you step by step through the correct handling of VAT and salary deductions, making it easy and secure to offer benefit bicycles.
For more information, please see the Swedish Tax Agency’s guidance on VAT for benefits:
Swedish Tax Agency – VAT on benefits