Sweden to Offer Tax Break on Repairs

September 22, 2016 Taxation in Sweeden

Tax brake on bicycle repairsSTOCKHOLM – Sweden is trying to foster a recycling culture by offering tax breaks for repairs on clothes, bikes, and other household goods.

On September 20th the government of Sweden released it latest national budget plan, outlining new proposal to slash the taxes applicable on the repairs of many household items.

Under the proposed tax change, the VAT rate applicable on repairs on household whiteware will be slashed from 25 percent to 12 percent.

The government has also proposed that minor repairs on many household items such as bicycles, leather goods, shoes, clothing and textiles should also fall under the scope of the reduced rate of VAT.

The government expects that the reduced levels of revenue from VAT collections will be compensated by increased collections of income tax revenues.

It is hoped that the new tax breaks will encourage consumer to repair and recycle products instead of purchasing new items, a move which may not only help the financial position of taxpayers, but would also aid Sweden in reducing emissions levels.