(edit title) Tax demand for new 'enskild firma' Do I have to pay? Options

[corduroykid]

I have just registered my enskild firma with Skatteverket, and the application forms asked for an estimate of how much I thought the company would make in the first year. Now that they have (finally) approved my case and given me F-skatt, they have also sent a bill, which says I need to pay around 8000kr a month starting in July.

My question is, what happens if I'm not earning enough to cover this? I think by the end of the year it should be possible to make the money that I put on the form, but it will be a relatively slow process to build my customer base to that level and I do not anticipate having sufficient customers by July to pay this amount.

Kind of freaking out here. If Skatteverket insists I have to pay more tax than I have even earned, I'm really in trouble.

[Kibiri]

I think you can apply to change that. You could even ask 0 tax (upfront) for the first year, afaik.

[Bender B Rodriquez]

You should resubmit a new estimate on how much you will make, ideally 0 kr, since your preliminary tax payments are based on this estimate. You can resubmit as many times as you wish.

[Yorkshireman]

Discuss it with the tax office, they even accept email questions and respond reasonably quickly :-)

Unlike many countries, What I have found is that Skatteverket in Sweden is very very helpful.

The basic question to ask them is, Are You to pay according to actual or estimated invoicing/income ?

One thing to remember here in Sweden, which is slightly different from some countries, is that VAT is payable to the tax office on invoices issued, regardless of due date or payment receipt (unless that has changed recently?). There was a big hoo-ha about this when it changed many years ago, as even large companies complained that effectively meant they were acting as debt collectors for the tax office. Prior to that You only paid to tax office VAT payments received.

Get an accountant for advice, shouldn't cost too much :-)

[sandon]

Just complete the yearly estimate of income gains again but give a much lower amount.
You have to take in all costs that you are going to have throughout the tax year.
If it is going better than the prediction place the excess in an account for the tax man next year.

If you require tax or book keeping in the future i am an accountant with a small firm and always looking for new clients.
Good luck

[bagbuoy]

VAT is payable to the tax office on invoices issued, regardless of due date or payment receipt (unless that has changed recently?).

There are two systems. Especially with enskild firma you can choose to only pay VAT on payments received. The exception is at the end of the year, where all outstanding invoices are counted as belonging to the business year that is coming to an end.

The difference is between what is called "bokslutsmetoden" (or "kontantmetoden") and "fakturametoden". For a typical consultant with "enskild firma" you will usually want to use bokslutsmetoden.

[bagbuoy]

My question is, what happens if I'm not earning enough to cover this? I think by the end of the year it should be possible to make the money that I put on the form, but it will be a relatively slow process to build my customer base to that level and I do not anticipate having sufficient customers by July to pay this amount.

Kind of freaking out here. If Skatteverket insists I have to pay more tax than I have even earned, I'm really in trouble.

No need to freak out. As others have pointed out you can submit a new "preliminär inkomstdeklaration" and get the monthly f-skatt payment reduced.

The first few years with your company it's a very good idea to lowball it so that you can build up a liquidity buffer.

Just be very very sure to save enough money in your firm to pay your taxes at the end of the year.

Rule of thumb, if a customer sends you 1000 kr (including VAT, if 25%), you can take out 400 for personal use. The rest should be saved to pay VAT, tax and egenavgifter. Another way of saying the same thing is you can take out half of what comes in that isn't VAT. Assuming 25% VAT, the above 1000 kr equals 200kr VAT and 800kr income of sales. You can take 800/2=400 kr and go to the pub.

If you have a lot of expenses this can be different, and you may need to take less.

If you're losing sleep or freaking out, don't hesitate to enlist the aid of an accountant. A good accountant is a godsend, a balm, a wonderful thing. The cost is negligable compared to the benefits. I say this as a regular joe, am not an accountant myself.

[corduroykid]

Wow, thanks for all the quick and thorough responses!

Can I choose to pay at the end of every year, or just the first?

My sambo said that if I overestimate how much I earn and then can claim some of it back, it would probably be the end of 2013 before I see my money again - can anyone confirm this as he wasn't entirely sure how long it takes.

Feels like I'm just getting so bogged down in all the forms and hoops they are making me jump through, especially when everything is in Swedish and I'm not quite fully understanding everything.

Sandon, I will be needing an accountant to help me out when I get to that stage - what part of the country are you in?

[corduroykid]

You can take 800/2=400 kr and go to the pub.

Great, that'll be 2 pints for me then...

[skogsbo]

It really pays to quote zero profit in year 1, you want the money in your savings account earning peanuts in interests, but more importantly it's there as a buffer, should things change.
They don't trust folk to pay later, but they really should have a different system for start ups.

[corduroykid]

you want the money in your savings account earning peanuts in interests

That's if I can even get a savings account... I tried to open a business account on Friday and Nordea said I need to have a Swedish passport for that! They are 'trying to work around that' and hopefully they will tell me tomorrow that they have stopped behaving like idiots.

[skogsbo]

I would go to other banks and tell nordea that you are, then who ever works around the imaginary problem first gets the trade.

[bagbuoy]

My sambo said that if I overestimate how much I earn and then can claim some of it back, it would probably be the end of 2013 before I see my money again

It will be the end of 2013 before Skatteverket sends you their decision on your final taxes for the 2012 business year. But by spring 2013 you can have worked out your taxes already (especially if you get help from an accountant). So if you've built up a buffer in your company you could take the refund out from there. You can replace it later with the refund or by paying less from your company into your tax account.

Feels like I'm just getting so bogged down in all the forms and hoops they are making me jump through, especially when everything is in Swedish and I'm not quite fully understanding everything.

You can probably get some free help at your nearest Nyföretagarcentrum, in case you aren't already in touch with them.

[Yorkshireman]

That's if I can even get a savings account... I tried to open a business account on Friday and Nordea said I need to have a Swedish passport for that! They are 'tr ... (show full quote)

That's if I can even get a savings account... I tried to open a business account on Friday and Nordea said I need to have a Swedish passport for that! They are 'trying to work around that' and hopefully they will tell me tomorrow that they have stopped behaving like idiots. ... (hide full quote)

They are telling You porkies! ... or the message should be, don't use Nordea!

Most other banks allow You to open personal accounts with just a Swedish ID card and Your personal number that comes from the Tax office. Normally they have restrictions that mean You cannot have credit cards until You have been here for a couple of years (build up credit history).

If I remember correctly, Your company registration number will have the same id as Your person number (or maybe I am mixing that with another kind of company!) ... if this is the case, find a bank that allows You to open a personal account, and open 2 ... name one of them for Yourself and the other for Your company, just to avoid mixing up funds ;-)

If what Nordea says is true, then they are saying that only Swedish Citizens can open business accounts!... There are more companies started in Sweden by non-swedes than by Swedes every year!.

[skogsbo]

Most other banks allow You to open personal accounts with just a Swedish ID card and Your personal number that comes from the Tax office. If I remember correctly, Your company ... (show full quote)

Most other banks allow You to open personal accounts with just a Swedish ID card and Your personal number that comes from the Tax office.
If I remember correctly, Your company registration number will have the same id as Your person number ... (hide full quote)

yes and yes I believe. I had no dramas at Handels, UK Passport and my pers. number. At a rural branch though, where new customers are probably valued more.