Foreign VAT – reverse charge within and outside the EU

🌍 What is reverse charge VAT?

For some purchases from foreign suppliers, the supplier does not add Swedish VAT. Instead, you as the buyer report the VAT yourselves – this is called reverse charge. It means that:

🧾 The supplier invoices without VAT
📤 You report output VAT
📥 You deduct input VAT
📊 The net is zero if you have full deduction rights

👉 Applies to: administrators who set up VAT settings and accounts. Users find how to choose the VAT type in the user article Choose VAT type for foreign purchases.

🧭 VAT types in Expense

VAT type	Used when
🇸🇪 Domestic	The purchase was made in Sweden with Swedish VAT
🇪🇺 EU VAT	Purchase from a supplier within the EU where reverse charge applies
🌎 Outside the EU (with VAT)	Purchase from a supplier outside the EU where reverse charge applies
🌍 No VAT	Foreign purchase without deductible Swedish VAT, for example a hotel abroad

👉 EU VAT and Outside the EU only show when they are activated and the transaction is in a foreign currency.

⚙️ Step 1 – Activate EU VAT and VAT outside the EU

Go to Accounting > VAT settings.
Select Use EU VAT.
Select Use VAT outside the EU if you also buy from suppliers outside the EU.
Click Save.

✅ The new VAT types now show when expenses are accounted for, on the web and in the app.

📁 Step 2 – Add VAT accounts to the chart of accounts

Go to Accounting > Accounts.
Add accounts for:
- 📥 Input VAT
- 📤 Output VAT
Set the accounts as system accounts.

👉 System accounts are used automatically and are not visible to users. You can use the same or different accounts for EU VAT and VAT outside the EU.

🔗 Step 3 – Link the accounts in the VAT settings

Go back to Accounting > VAT settings.
Choose the accounts for input and output VAT for EU VAT.
Do the same for VAT outside the EU.
Click Save.

✅ Expense now accounts for the reverse charge VAT on the right accounts.

👤 For users

The user chooses the VAT type and enters the VAT amount when doing the accounting for the expense. How it works is described in the user article Choose VAT type for foreign purchases.

👉 Give users clear guidelines on when to use each VAT type.

📊 What happens in the accounting?

📤 Output VAT is accounted for on the output VAT account
📥 Input VAT is accounted for on the input VAT account
💱 The amount is converted to your base currency
✅ The expense report is ready for export

👉 If you may not deduct the full VAT, the user only enters the deductible part. If different rules apply per department or cost type, you can use modified VAT.

📱 The app

🔄 Users need the latest version of the app to see the VAT types. Update through the App Store or Google Play.
📲 iOS: if the options still do not show, it can help to delete the app and install it again.

⚠️ Common mistakes to avoid

❌ Domestic VAT is chosen instead of EU VAT
❌ VAT accounts are missing or not linked
❌ The wrong VAT amount is entered

💡 Tips for the best result

✅ Set up the chart of accounts correctly from the start
🔄 Test with a sample expense before you tell the users
📋 Check the VAT settings regularly
👥 Tell users which VAT types to use

❓ Frequently asked questions (FAQ)

What is reverse charge VAT?
You as the buyer report both output and input VAT instead of the supplier.

Why can the user not see EU VAT?
Check that EU VAT is activated, that the transaction is in a foreign currency and that the app is updated.

Do we have to add the accounts ourselves?
Yes, the accounts are added to the chart of accounts and linked in the VAT settings.

Does the user have to enter the VAT amount?
Yes, the user enters the deductible amount. Expense accounts for the rest.

Is there a cost?
No, with full deduction rights the input and output VAT cancel each other out.

Does it work in the app?
Yes, both in the app and on the web.

✅ Summary

⚙️ Activate EU VAT and VAT outside the EU in the VAT settings
📁 Add and link VAT accounts as system accounts
👤 The user chooses the VAT type and enters the VAT amount
📊 Expense accounts for the reverse charge VAT automatically