From 1 January 2021, the RUT deduction also covers laundry that is submitted to professional laundries. This means that private individuals can receive a price reduction of 25 percent after RUT deductions for services they buy from a laundry and textile service company.
This is likely to mean that demand for our services will increase in the near future. At the same time, this means that there are certain routines and regulations that you must adapt to if you want to use the opportunity to offer RUT deductions to customers.
Below is a description of what changes will take place and some things that may be good to think about.
In order for existing and future customers to take part in this happy news, we have created materials that you can use. There are files for printing and for digital use.
You who are a member of the Swedish Textile Service Association are welcome to use Tvätt-RUT in your marketing. Download the logo washing line under Business> Marketing or contact the office to get decals.
What is the RUT deduction?
The RUT deduction makes it cheaper for customers to buy certain household services. For example, it is common to have a RUT deduction for home cleaning.
In practical terms, the customer pays only part of the cost of the service. The remaining cost is requested from the Swedish Tax Agency by the company that sells the service.
The RUT deduction was introduced in 2007. The purpose was to:
- To free working people from housework
- To increase the number of entry-level jobs in the labor market
- To reduce the proportion of undeclared work.
Which services in laundry and textile services are covered by the RUT deduction?
The RUT deduction applies to laundry, including drying and other finishing as well as minor repairs of clothes and home textiles. The deduction only applies to water washing. Dry cleaning and washing of carpets that require special equipment or knowledge are not covered by the deduction.
The deduction also applies to pick-up and drop-off of the laundry in the home or at so-called depot service. This presupposes that the transport is included as part of the service.
There are probably some services where it can be difficult to determine whether they are covered by the RUT deduction or not. One starting point is that the RUT deduction should apply to such laundry that households can perform themselves without special equipment or knowledge. If you are unsure what applies in any case, you can contact the Swedish Tax Agency for advice, they are the ones who make the decision in the matter.
What does this mean for us as a company?
For companies that want to offer RUT deductions for laundry and textile services, this probably means that you have to adapt certain routines. Some of the things that are important to keep in mind are that:
- You need to have a routine to get information about the customers. To request the compensation from the Swedish Tax Agency, you need the customer's social security number. For example, you can have it as a routine to fill this in at the first contact with the customer.
- It can be good to consider if there is something else you want to adapt in the contact with the customers. Many companies that offer RUT services, for example, have agreements with the customer which regulate what happens if the Swedish Tax Agency rejects a request for payment.
- Payment must be made electronically. For example via invoice, card payment or Swish. You must also be able to prove certain information as a basis for the payment from the Swedish Tax Agency, for example the total amount, the size of the box deduction, type of service and the customer's name and social security number. What information should be included in e.g. an invoice or receipt appears on the Swedish Tax Agency's website.
- To calculate the RUT deduction, you need to calculate the labor cost. This is simple because they set a standard that 50 percent of the total cost of the service is labor costs. The actual RUT deduction is then 50 percent of the labor cost. In total, the customer receives a price reduction of 25 percent after RUT deductions.
- Payment must be made directly to a laundromat within Sweden and the rest of the EU / EEA and Switzerland as defined in the law. According to the Swedish Tax Agency, this means that sales to at least 75 percent must come from cleaning textiles and associated rental, dyeing, repair and modification. This means that the customer cannot receive a RUT deduction if the payment is made to an agent who receives payment from the end customer but hires you to perform the service, or if large parts of the company's turnover comes from another service. This also applies to e.g. subsidiary of a laundromat.
- This may mean that the transaction flows must be adjusted, so that the laundry invoices the customer directly.
- An alternative is to notify a representative as a competent representative to the Swedish Tax Agency. The representative may then request and receive compensation for RUT work on behalf of the contractor.
- You need to review your options and decide how to request the compensation from the Swedish Tax Agency. There are two ways to do this. The first way is to export files from your accounting system, and then upload them to the Swedish Tax Agency's e-service. For a large number of customers, this is the easiest way, but it requires that there is support for it in the accounting system. The second way is to enter the information manually in the Swedish Tax Agency's e-service. There is a number of information that must be entered about each customer, so expect that this may take time if it is a larger number.
What does the customer need to do?
The customer does not have to do anything. All administration and contact with the Swedish Tax Agency is handled by the company.
It can be good for private individuals to know if they have RUT deductions left to use. You can find out through the Swedish Tax Agency's e-service Rot och rut - my deductions or in the Swedish Tax Agency's app.
Which customers are entitled to a RUT deduction?
There are a number of requirements for someone to be entitled to a RUT deduction. The most important is that the customer should:
- Have turned 18 before the end of the year.
- Be resident in Sweden or pay 90 percent of their total income tax in Sweden.
- Pay enough tax to be able to deduct.
- Have space left to make tax deductions on square work. There is also a ceiling of SEK 75 per year.
Do I have to offer RUT deductions to the customer?
No, it is up to the individual laundry to decide if they want to offer RUT deductions. As it is associated with a certain administration, there may be those who only partially or not at all offer the deduction.
More information and questions
We anticipate that a number of issues will arise in the first place. The Swedish Textile Service Association has ongoing contact with the Swedish Tax Agency and can pursue issues that are relevant to the industry as a whole.
If you have questions about how the RUT deduction works in a purely practical way and which laws and regulations apply, we primarily recommend that you contact the Swedish Tax Agency. There is extensive information about RUT deductions and the laws and regulations that apply The Swedish Tax Agency's website. There is also contact information if you want answers to specific questions.