Sweden Raises Interest Rates on Late or Delinquent Tax Payments

Starting in November 2022, the relevant penalty for late VAT payments in Sweden will increase.

Sweden raised its benchmark interest rate from 1.25 percent to 2.5 percent. In addition, the interest earned rose from 0% to 1.125%. Here is where the formal announcement may be located.

In various cases, the base rate influences the low and high-interest rates that apply to a company’s late tax payments.

As of November 1, 2022, the following interest rates are applicable:

  • Instead of zero, the earning rate is 1.125%.
  • A low-interest rate of 2.5%, as opposed to 1.25%
  • A high-interest rate of 17.5%, as opposed to 16.25%.

The low-interest rate is the same as the basic interest rate, 2.5%. Deferred tax payments made under arrangement with the Tax Agency may be subject to this rate. This also holds true if the actual tax liability is less than what was stated. If the Swedish Tax Agency or a court ruling changes the final VAT situation, this clause may be applicable.

The premium rate is calculated by adding 15% to the base rate for 17.5%. When taxes are paid after the deadline or a payment obligation is imposed by the authorities, among other situations, significant interest is added to the total amount still outstanding. High interest is computed and accrued until the shortfall is paid or when the sum is turned over to the Crown Enforcement Officer, whichever occurs first.

Last, the income interest that applies to the tax account balance is called the earning interest. Following a long period at 0%, this income interest was instituted in 2017.

The benchmark interest rate in Sweden has been raised from 1.25 percent to 2.5 percent. The interest earned also rose from 0% to 1.125%. You will find the announcement here.