Sweden Introduces New Chemical Tax

Sweden Introduces New Chemical Tax

As of July 1st, 2017, all white goods and electronics providers selling to the Swedish market will be required to perform supply chain due diligence to determine whether their products contain certain hazardous substances. This Swedish Chemicals Tax is designed to dissuade electronics producers from using hazardous materials in their products in order to reduce Swedish citizens’ exposure to these harmful substances.

Which products are in scope?

A broad category of electronics defined as “white goods and other electrical goods” (such as computers, tablets, televisions, phones, game consoles, routers, etc) will be subject to the taxation regime.

Which companies are in scope?

The chemical tax applies to any company manufacturing in-scope goods in Sweden, or any company that sells in-scope goods in the Swedish market from other EU and non-EU countries.

How are products taxed, and at what rate?

A product’s six-digit customs code determines if a product is in-scope. The tax amount is calculated relative to the weight of the product. The amount will be 8 SEK/kg (~$1.00USD) for white goods, and 120 SEK/kg (~$13.60USD) for other electronics. The tax is capped at 320 SEK (~$36.25USD) per product. This is important for electronics manufacturers given these amounts can easily add up to a considerable sum within a short period of time.

Are some products eligible for tax reductions?

If an in-scope product contains relatively low levels of a dangerous chemical, a deduction of either 50 percent or 90 percent may be applicable. This is dependent on the proportion of particular compounds (bromine, chlorine, and phosphorous) included in any circuit boards or plastic components that form part of an in-scope product. Taking advantage of this deduction is contingent on the ability to quickly survey your supply chain and leverage your existing materials compliance programs to identify components and assemblies that qualify.

Which products are eligible for exemptions?

Items sold directly from a foreign seller to a consumer in Sweden, items originating from outside of Swedish territory, or items from an authorized stockist may be eligible for an exemption from tax liability. Swedish Customs will make this determination. You will need a defensible process and due diligence record to qualify.

How does this relate to EU chemicals regulation?

The Swedish Chemicals Tax should be seen as complementary to existing EU chemical regulation such as RoHS and REACH as it, too, helps to reduce the presence of hazardous substance in products.  

What can companies expect from this law in the future?

It is expected the scope of the new chemical tax will be gradually widened in the coming years, including an expanding range of hazardous chemicals and consumer products. Companies will be well-positioned for these impending changes by implementing flexible compliance programs now which have the capacity to remain relevant when regulatory expansions occur.

The Assent Advantage

As the global leader in compliance data automation and supply chain transparency, Assent is uniquely equipped to address the challenges affecting your access to markets. Assent streamlines due diligence by optimizing and digitizing supply chain surveying through our best-in-class software platform. This gives you a comprehensive view of the materials and components in your products, and empowers you to leverage that data to make informed product-related decisions.

Want to learn how the Assent Compliance Platform can benefit your due diligence program? Read about it here, or contact us to book a free software demo.

Alternatively, get in touch with our regulatory compliance experts at info@assentcompliance.com.