A legislative proposal would expand the simplified profit margin taxation method for second-hand goods, introduce a qualified VAT exemption for certain food donations and amend the Value Added Tax Act (2023:200), with the changes planned to take effect from 1 January 2028.
The Swedish government has proposed reforms to simplify Value Added Tax (VAT) rules for second-hand goods and food donations, with amendments to the Value Added Tax Act (2023:200) aimed at reducing administrative burdens for businesses while supporting reuse and reducing food waste.
The legislative proposal was published on 2 July 2026 and referred to the Council on Legislation.
Simplified profit margin taxation expanded
The proposal would broaden the scope of the simplified profit margin taxation method to cover second-hand goods with a purchase price of not more than SEK 10,000.
Under the simplified method, taxable dealers would not be required to track the purchase and selling price of each individual item. Instead, VAT would be calculated using a periodic profit margin, reducing the administrative burden compared with the ordinary profit margin taxation method.
The proposal also raises the threshold for applying the simplified calculation to all goods eligible for profit margin taxation. Dealers whose purchases or sales consist of at least 90%, by value or quantity, of goods covered by the simplified rules would be able to include all eligible goods in the periodic calculation, replacing the current 75% threshold.
It also clarifies that where purchases exceed sales during a reporting period, creating a negative profit margin, the deficit may be carried forward to the immediately following reporting period.
Transitional rules provide that goods delivered to a dealer before 1 January 2028 would remain subject to the existing rules, even if they are sold after the new legislation takes effect.
Qualified VAT exemption for food donations
The proposal also introduces a qualified VAT exemption for food donated without consideration to approved gift recipients carrying out qualifying social assistance activities.
The exemption would apply to food subject to the reduced VAT rate, while allowing donors to retain the right to deduct the related input VAT. Eligible products would include food items such as bottled water but exclude alcoholic beverages including spirits, wine and strong beer.
The government said the measure is intended to address uncertainty under the current withdrawal taxation rules, under which businesses transferring goods without consideration may be required to account for VAT. The clearer framework is expected to encourage food donations, reduce waste and support charitable organisations.
Economic impact
According to the proposal, the reforms are expected to reduce businesses’ administrative costs by around SEK 34 million annually. Food donations are projected to increase by approximately 10,600 tonnes per year, providing an estimated 20 million additional meals for vulnerable people. The overall impact on public finances is estimated at around SEK 70 million per year.
The proposed amendments are currently undergoing legislative review and are intended to take effect on 1 January 2028.
