A couple of months ago we reported that Swedish app developers were facing a double value added tax in the EU market. Once implemented, the tax would have put several Swedish startups at a competitive disadvantage.

With pressure from Per Strömbäck, spokesperson for the Swedish Games Industry, and others, the Swedish authorities finally caved in last week and announced that they will put the double tax on indefinite hold until EU member states can agree on common guidelines for the taxation of electronic services.

”A great relief,” said Strömbäck. ”A lot of members have been worried. The double taxation issue looked to become a real hindrance to this evolving industry. We can now compete on the same terms as other app development companies throughout the rest of Europe.”

The Swedish Ministry for Finance had apparently interpreted current EU VAT regulations differently from all other member states, causing the tax to fall twice on developers in Sweden. We can only hope that the new EU directives, which will be introduced in 2015, will not leave any room for such interpretations.

As for the damage already done, double taxes collected since October can be claimed back from the Swedish government retroactively.

Image by Cristiano Betta