How to handle Swedish Sales Tax requirements
GaryNiemen
Member Posts: 8
We are a small natural health company in Sweden using Wave. So SEK is the currency. At the end of the year, the Swedish tax authorities needs Sales Tax totals per percentage (6%, 12%, and 25%), and per currency (for example, Pound Sterling and Euros and USD).
For example, if we buy books from Amazon UK for the company then we need to record a 6% Sales Tax for the above special end of year calculation. We have named this calculation fake Sales Tax because in terms of the bookkeeping itself, we cannot record the Sales Tax. That is, we have to put 0 for Sales Tax when recording the expense (for things bought from outside of Sweden). Continuing with the books example, we add the total cost of the books (including the UK-added Sales Tax) and treat that as the total. Many have complained that this is a weird set up but that's how it is done for now. Anyway, what is the best way to handle the above in Wave. How can I record 0 for Sales Tax when buying from outside Sweden - and yet at the same time keep a tag for all these items so that I can easily produce the report for the Swedish tax office at the end of the year. And, remember, it is per Swedish Sales Tax (6%, 12%, and 25% - no matter the rates in other countries) and it is per purchase Currency. Thanks for the help and guidance.
Comments
Hi, @GaryNiemen.
You can't currently sort transactions by taxes, and the sales tax report only gives you taxes spent and paid, so making a handful of fake taxes with a 0% tax amount wouldn't be useful (but that was my own first instinct).
You could create a set of expense accounts for those transactions and call them, for example, "Euro 6%", "Euro 12%" and "Euro 25%". This would allow you to pull the total for each of these easily through your Account Transactions report.
I do recommend you talk to an accountant on this matter, however. While we're more than happy to offer help with management account, we can't offer advice for tax accounting, so it's always a good plan to discuss tax issues with a specialist.
That helps, thanks Alexia. Your suggestion is what I came up with too. Just to clarify, the Swedish tax authorities of course need Sales Tax in and Sales Tax out for stuff bought and sold in Sweden. And then, separately, they need this Sales Tax information as described above - that is, kind of fake Sales Tax totals for everything bought abroad grouped by Sales Tax amount and country. I call it fake because in reality we cannot claim this Sales Tax in our books. And also because in some cases we haven't even paid Sales Tax becuse our company is registered with the company abroad and, hence, skips Sales Tax.
Fantastic! Happy to help, and thank you for the insight on Swedish tax practices!