Increased value for the Corona-related tax-free gift to employees in Sweden 2021
The value of the tax-free Corona-related gift to emplyees in Sweden has increased for the year 2021. The tax-free Corona gift for the year 2020 was SEK 1,000. For income year 2021, there is an increase to SEK 2,000, which will be the value for a gift that employers in Sweden can give to an employee without tax consequences. That is, there will be no mandatory benefit taxation to handle (where many employees otherwise have to pay about 50% in tax on the value of the gift), nor will there be any social security contributions for the employer to pay.
This gift is a tax-free gift that is in addition to the already existing, statutory tax-free gifts to in Sweden to employees that we recognize as a Christmas gift, memorial gift and anniversary gift.
For this corona-related gift that is tax-free up to SEK 2,000, it is also specifically stated that the employees can receive this gift as a gift card at restaurants and shops and thereby support the local business community.
Tax-free Christmas gift in Sweden increased to SEK 500 for income year 2021
Updated February 24,2021
Christmas is still far away, but already now the value of the tax-free Christmas gift has been increased from SEK 450 including VAT to SEK 500 for the income year 2021. Regarding the tax-free "Corona gift" that the employer could give employees during 2020 without tax consequences in the form of benefit taxation, in combination with the Christmas gift (that made up a total tax-free gift to employees of SEK 1,450 ), there is still no decision on such a tax-free "Corona gift" for 2021.
Below you find the rules applicable for 2020
The Swedish Tax Agency issued a temporary tax exemption for gifts earlier this year, please see below. Which, if the company has the opportunity financially, can be combined with the original SEK 450 that may be used for a Christmas gift. This means that gifts up to SEK 1,450 (incl. VAT) can be given per employee in a company, if you have not already used the SEK 1,000 earlier in 2020.
The company may deduct VAT and deduct the cost of the gift. Though, should the maximum amount be exceeded, the recipient must pay a benefit on the entire amount and it will not be deductible.
The gift should be just a gift, not pure money or something that can be exchanged for money.
Posted September 7 2020:
To give the opportunity to show extra appreciation to staff in these difficult circumstances, from 1 June there is a temporary tax exemption to give gifts. The purpose of this temporary tax exemption is also to stimulate increased consumption. The benefit of free parking at the workplace has been created because many business owners want to offer their staff free parking to facilitate compliance with the recommendations of the Swedish Public Health Authority, to avoid public transport.
Temporary tax exemption for gifts
A temporary tax exemption for gifts from the employer applies during the period June 1, 2020 to December 31, 2020. This is on gifts up to a value of SEK 1,000 per employee. This applies in addition to the existing opportunities to give tax-free gifts, such as Christmas gifts. The decision came into force on June 1, and applies to gifts made from June 1 to December 31, 2020.
If the gift is worth more than SEK 1,000, the part that exceeds SEK 1,000 is taxed. The employer may deduct the cost of the gifts as a personnel expense.
Money gifts are not tax-free. Other means of payment such as check, money order and gift cards that can be exchanged for money are considered as money. Gift certificates that cannot be exchanged for money, on the other hand, is a tax-free gift.
The gift must be given to all employees or to a larger group of employees.
Temporary tax exemption for the benefit of free parking
New from the Swedish government is a change that entails a temporary tax exemption for the benefit of free parking in connection with the workplace.
The tax exemption is temporary and applies to benefits provided after March 31, 2020 until the end of December 2020.
The background is that many employers want to offer their staff free parking to facilitate staff to follow the recommendations of the Public Health Authority, to avoid public transport. Laws can in some cases be applied retroactively if it is to the benefit of the affected personnel, the correction will only appear in the declaration next year and they will then get the tax money returned. For the coming months, from June and onward, Accountor will correct this directly when doing the payroll administration benefit of the taxpayer.
According to the temporary law change the benefit of free parking at the workplace should not be taxed.
Employees who are taxed according to SINK can also receive the same tax-free benefits as described above. The benefit of free parking as well as the benefit of gifts that are tax-free should in addition be exempt from social charges.
How does Accountor act with regards to our clients: Instead of doing an extra payroll run to rectify this retroactively, we / or you as a customer can go directly to the Swedish Tax Agency's page and correct it. For affected personnel, the correction will only appear in the declaration next year and they will then get the tax money returned. For the coming months, from June and onward, Accountor will correct this directly when doing the payroll administration.