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Report earnings in an economic association

Everyone who has had income from business activities reports this in an income tax return. Economic associations file their own income tax return. The final tax payable by the association is shown in the final tax assessment notice.

If the association is considered a close company, special tax rules apply to the owners. As a partner in a close company, you must declare dividends and capital gains on qualifying shares. Even if you have not taken any dividends or sold any shares, you should file this annex.

If the association makes a loss

In associations, it is possible carry forward a deficit in the business and apply it in the future. The deficit is entered in next year's tax return and reduces next year's income. If the next year's profit does not cover the saved loss, the loss may be saved until it is fully deducted.

Tax allocation reserve

The rules regarding tax allocation reserve mean that you can defer the taxation of the business income to a later year. The association can thus obtain a kind of tax credit. The tax allocation reserve can also be used to even out the results between different years and thus achieve more even taxation. If you know you will have a loss in a particular year, you can allocate money to the tax allocation reserve in years leading up to this and then reverse it to taxation in the year with loss. In this way, you can offset profit against loss.

In economic associations, 25 percent of profits can be set aside in a tax allocation reserve. The reserve must be reversed to taxation within six years. Economic associations and other legal entities are taxed at a standard tax rate on allocations made to the tax allocation reserve.

If you cannot submit your return by the deadline

If you or the association is unable to submit the tax return on time, it is possible to apply to the Swedish Tax Agency for an extension. To be granted an extension, there must be special reasons.

VAT and PAYE tax returns

All companies that are registered for VAT must submit a VAT return. The VAT return can be submitted quarterly or monthly. In some cases, it may be submitted once a year.

If the economic association is an employer, you must submit a PAYE tax return. You must also submit a PAYE tax return if you made tax deductions without being obliged to make deductions.