Client Success Stories Case 4: Optimizing VAT for a Swedish Dropshipper

The Situation
A Swedish Shopify merchant selling electronics accessories imported products directly from Shenzhen to Stockholm. By default, Shopify charged 25% Swedish moms at checkout. Customers were frustrated because PostNord charged import VAT again upon delivery, plus an administrative fee of 75 SEK.

The Problem
Swedish law, following the EU VAT Directive, confirms that the place of supply is outside Sweden if the transport starts outside the EU. Thus, moms should not have been charged at checkout for these imports.

Legal reference: Mervärdesskattelagen (1994:200), Chapter 5, Section 2 (aligns with Directive 2006/112/EC, Article 32).

Our Approach

  1. Conducted a detailed audit of Shopify tax settings.

  2. Prepared a compliance report citing Swedish VAT law (Mervärdesskattelagen) and the EU Directive.

  3. Advised the client to opt out of charging VAT at checkout for non-EU shipments and clearly communicate this to customers.

  4. Helped file a correction for prior overpaid VAT and liaised with Skatteverket (Swedish Tax Agency).

The Outcome

  • Skatteverket accepted the correction and refunded over €21,000 in overpaid VAT.

  • Customer complaints dropped sharply after VAT was removed from checkout.

  • Profit margins improved significantly, as the store stopped remitting unnecessary VAT.

Key Takeaway
In Sweden, as in all EU countries, VAT on dropshipping imports is collected at import, not at checkout. Understanding this saved the client money and improved customer trust.

Selling into Sweden? Let us help you optimize your VAT compliance and protect your margins.

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