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Sweden: New deductible amounts for business, promotional gifts

Sweden: New deductible for business, promotional gifts

The Swedish tax agency (Skatteverket) published new deductible amounts for business or promotional gifts. The new deductible amounts apply from 1 January 2018.

1000

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Business gifts

Beginning 1 January 2018, the maximum deductible amount is increased from SEK 180 (excluding value added tax (VAT)) to SEK 300 (excluding VAT) per person. To be deductible, there must be an immediate relationship with the business—that is, the gift must be provided in conjunction with a business meeting or with respect to a customer opening a new branch or observing an anniversary. Gifts submitted in connection with weekends or personal holidays are not deductible. The same applies to wreaths or flowers given in connection with deaths; according to the Swedish tax agency, these gifts represent an “excessive amount of personal generosity.”

Advertising gifts

Beginning 1 January 2018, the deduction for promotional gifts may be available for “reasonable amounts” but no more than SEK 300 (excluding VAT) per person. Advertising gifts are products that directly relate to the company's range of products or manufacture. There may also be “simpler” gift items—for instance, almanacs or umbrellas with the company’s name or logo. Gifts of a “personal nature” are not deemed to be eligible promotional gifts.

Previously, there was no limit for promotional gifts, but a judgment of the Supreme Administrative Court provides that promotional gifts having a value of at least SEK 350 (including VAT) could be considered to be of a “simpler kind” and thus deductible until 31 December 2017. Yet, deductions of significantly lower amounts had been denied in other cases. The tax agency, thus, has clarified the treatment of such items.

 

Read a January 2018 report (Swedish) prepared by the KPMG member firm in Sweden

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