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 makes a loss
In associations, there is an opportunity to save a deficit in the business going forward. The deficit is entered in next year's return as a tax adjustment.
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 the association cannot submit the return by the deadline
If an economic association cannot submit its income declaration in time, it is possible to apply for an extension from the Swedish Tax Agency. Special reasons are required to obtain a reprieve.
VAT and PAYE tax returns
An economic association that is VAT registered must submit a VAT return. The VAT return can be submitted monthly, quarterly or 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.