Seventh amendment to the Electronics Tax

The Ministry of Finance is now presenting a new proposal for changes to the electronics tax. The change is the seventh major change in the series and will entail additional administration for companies. Here we go through the proposal step by step.

What is unfinished and does not work must be changed, this applies most of all to the electronics tax (called the chemicals tax by the authorities). Now further proposals for changes to the electronics tax are coming from the Ministry of Finance. The proposal is titled A simpler and clearer chemicals tax. You can read about how it is with simplicity and clarity. here where the entire proposal is presented.

APPLiAnytt has calculated that this is the seventh significant change to the tax since its introduction just over 4 years ago – all with an administrative burden on companies that sell taxable goods. Below we give you a summary of the latest ”simplification” proposals from the Ministry of Finance.

Additive or reactive added is equated

It is proposed to simplify the deduction system so that the right to deduct is only affected by whether the flame retardant in the product contains bromine, chlorine or phosphorus. If a substance is additive or reactively added, it is proposed not to affect the right to deduct. This could mean that many current deductions are made impossible and total tax payments increase as it is proposed that reactively added substances are also taxed in full.

This makes it easier for the authorities to check the tax declarations that are made, as the actual presence of bromine, chlorine or phosphorus (regardless of additive/reactive) can be more easily checked through a simpler so-called XRF measurement, which is not possible with today's rules.

95 percent deduction possible

Goods that do not contain bromine or chlorine will be allowed a 50 percent deduction as before. Goods that also do not contain phosphorus are proposed to be allowed a 95 percent deduction. An increase from the current 90 percent.

This means that manufacturers/distributors who do not use flame retardants containing bromine, chlorine or phosphorus in their products will still be liable to tax. It is difficult to understand why a 100 percent deduction should not apply in these cases.

Reuse of Swedish goods is tax-exempt

In order to avoid double taxation of goods that enter the circular flow via so-called recycling, it is proposed that tax liability does not arise for goods that have previously been owned in Sweden by someone other than a warehouse keeper. Please note that recycled goods from abroad are not covered by this tax exemption.

A general exemption from taxation is also introduced for goods manufactured before 1 July 2017, when the electronics tax was introduced. However, there is no working proposal here for how the date of manufacture can be easily determined by recycling companies and inspection authorities.

Flat rate tax on private imports

Due to changes to customs regulations at EU level, which will be implemented on 31 December 2022, the net weight of the goods will no longer need to be stated on the customs declaration. As the tax is to be calculated on the net weight of a good (without packaging), the weight cannot be determined by the Swedish Customs through weighing in the extensive flow of goods from abroad.

A system of flat-rate taxation is proposed instead of import and unauthorized entry when the net weight of a good cannot be determined from the customs declaration. The flat-rate amounts should be based on the heaviest goods that are normally found on the market within each category. If taxation has been carried out according to the flat-rate, a taxpayer can submit a written application to the Swedish Customs with information about the weight within two months to have the tax calculated according to the ordinary rules.

It can be questioned whether this proposal is compatible with Sweden's international commitments on non-discrimination within the World Trade Organization (WTO).

New customs numbers (CN numbers)

The electronics tax is based on the customs code of the goods, the CN code, as defined in 2015. The reference to which goods are to be taxed is now proposed to be updated to the version of the CN code that was in effect on 1 January 2022. This means some reclassification of, for example, mobile phones, answering machines and various types of computer screens. This may mean significant additional administrative work for companies that are already confronted with constant changes to the structure of the electronics tax.

Referral round underway

The changes regarding certain private imports are proposed to enter into force on 31 December 2022. Other changes are proposed to enter into force on 1 July 2023.

The proposal has been sent out for consultation by the Ministry of Finance to companies and organizations and responses have been requested by April 19 this year. APPLiA and other business organizations will publish their consultation responses before this date. Please note that you are free to submit comments on the proposal to the Ministry of Finance even if your company has not been invited to a consultation round.

More information about how to respond to a referral can be found here. here. Remember to enter the referral reference number. Fi2022/00478 in your response to the Ministry of Finance.

Kent Oderud, Chairman of APPLiA

Electronics tax