Running your own business. Skatteverkets best advice

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Ziza Madani:
In our previous episode, we talked about the essentials of starting your own business. But once you've taken that step, what's next? What exactly is VAT, and what does accounting truly involve?

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Ziza:
Welcome to the “New in Sweden” podcast. The podcast for insights, guidance, and job-hunting tips in Sweden. This podcast is aimed at those of you who are new to the country. Today's episode is titled "Running Your Own Business". I'm Ziza Madani, and I'm joined in the studio by my colleague, Pär Axelsson. Both of us are from Arbetsförmedlingen, the Swedish Public Employment Service. We also have a special guest, Ulf Nilsson from Skatteverket, the Swedish Tax Agency, who will be shedding light on these topics.

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Pär Axelsson:
Hello, Ulf. Welcome back.

Ulf:
Thank you very much.

Pär:
In our last episode, we discussed the registration process for starting a company. However, another crucial registration to be aware of is VAT registration. Could you explain what that is?

Ulf:
Well, of course. VAT, or Value Added Tax, or “moms“ in Swedish, is a tax that we all pay when we are buying goods and services. As an individual, you typically don't need to worry about VAT, as it's usually included in the prices you see. But as a business owner, especially if your business is VAT-liable, keeping track of VAT becomes essential. Remember, VAT doesn't belong to you; it's your company's responsibility to report and remit it to the government.

Pär:
Hm… Can you give us a brief overview of how VAT works?

Ulf:
When customers buy from your company, they pay VAT. And it's your obligation to transfer that VAT to the government by submitting a VAT return to Skatteverket. It's important to note that VAT is a separate tax and shouldn't be confused with income tax. For more details, you can find extra information on how VAT works on skatteverket.se.

Ziza:
All right. And understanding the ins and outs of bookkeeping is crucial for new business owners. But what exactly is bookkeeping, and what should they keep in mind?

Ulf:
Well, if you run a business, you must have bookkeeping records. Bookkeeping is the practical task of regularly recording various financial events, such as purchases and sales, in different accounts. It's a systematic way of keeping track of financial transactions within a company.

Ziza:
And why is bookkeeping so important?

Ulf:
Correct bookkeeping is necessary to report taxes and fees correctly. It’s vital both for your own reference and for others, like banks or authorities, like Skatteverket, who may review your business.

Ziza:
Hm… All right.

Ulf:
And if you have a limited company, an annual report is also mandatory. The annual report must be submitted to Bolagsverket, the Swedish Companies Registration Office. For more information about bookkeeping, you can visit Bokföringsnämndens website, bfn.se. There, you'll find resources like short films and a booklet called "Att föra bok" with good information on bookkeeping.

Ziza:
All right. That’s good to know. And absorbing all this information can be a bit overwhelming, so remember to explore the links we mentioned earlier. They are available on arbetsformedlingen.se/play under each episode.

Pär:
Okay, Ulf. Now, let's dive into another significant aspect – taxable profit. This can be a complex concept, so could you break it down for our listeners?

Ulf:
Well, I can try. To make it really simple, you must declare and pay taxes on your company's earnings. This includes reporting all income generated by your business and making write-offs for your costs.

Pär:
Can you tell us more about what counts as revenue?

Ulf:
Revenue typically comes from sales, that is what you get paid by your customers when you sell goods and services to them.

Pär:
All right. What if I run a business like a food store and take out items for personal use?

Ulf:
If you sell food and take goods for personal use, whether it’s for yourself, your family, or your friends, you're required to pay tax as if you sold those goods to a customer. And when it comes to expenses, you can make write-offs for items that you need to generate income in your specific business. But keep in mind that the write-offs you can claim vary depending on your business type, so it's important to check the specifics for your company.

Ziza:
Let's shift our focus to preliminary tax, which is another aspect of running your own business. What does this involve?

Ulf:
Well, preliminary tax is essentially an estimate of your expected profit for the first year. You need to report this estimate to Skatteverket, which then calculates the amount of tax you need to pay throughout the year. You pay the same amount every month. But if you want to change your estimate, you simply notify Skatteverket, and we will recalculate a new tax. This is why it’s called preliminary tax.

Ziza:
So, business owners don't need to do the calculations themselves?

Ulf:
No. That's right. You don't have to handle the calculations personally. But it's crucial to pay the preliminary tax by the 12th of each month. If you find that your initial estimate was too high or low, you can adjust the amount via Skatteverkets website, and you'll receive a new tax assessment.

Ziza:
Thanks, Ulf, for sharing these insights with our audience today.

Ulf:
You’re welcome. It was my pleasure.

Ziza:
Do you have any last tips to add?

Ulf:
Yeah, I would like to add one more thing. If you want more information about starting a business in Sweden, we actually have special webinars on skatteverket.se, in English for your help. So, just go in there and participate.

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Ziza:
You can find all the links mentioned under the arbetsformedlingen.se/play section, under each episode. See you next time.

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speaker:
You have been listening to the New in Sweden podcast by Arbetsförmedlingen. You can find all previous episodes at arbetsformedlingen.se/play. Have you got any questions, tips, or ideas? Please email us at podcast@arbetsformedlingen.se. This episode was produced in the autumn of 2023.

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