Hohoho! Ready for Christmas, but what about company gifts and Christmas dinners?
Christmas is approaching and many employers are starting to think about company Christmas gifts for employees and who to invite for Christmas dinners. The rules around this can be difficult to interpret but we will help you sort out the different possibilities for companies in Sweden.
Christmas gifts for employees
- The value of the gift may not exceed SEK 500 including VAT to be considered tax-free. The employer may, of course, give more expensive gifts, but then the gift is seen as salary and becomes taxable for the employee from the first krona. The gift may not be given in cash.
- The employee can choose to donate money to a non-profit organization instead of receiving a Christmas gift from the employer, but then the employee must be taxed for the value of the gift equivalent as for salary.
- If instead the employer decides to donate to organizations, instead of giving a Christmas gift, the employee is not affected.
Temporary tax exemption for gifts up to SEK 2,000
During the period 1 January - 31 December 2021, a temporary tax exemption applies to gifts, which means that you are not taxed for benefits from gifts from your employer as long as the total value of the gifts does not exceed SEK 2,000 and that they are not given in cash. The rules came into force on 1 May 2021 but apply for the entire year.
Christmas gifts for customers
- Are not deductible but deductions are allowed for simpler advertising gifts of insignificant value. The gifts must have a direct connection to the company's business or be simpler gift items. Usually, these are some form of promotional gifts with the company logo on it.
Christmas dinner for employee
- Considered an internal representation, ie not a deduction for the company, but at the same time the employees avoid benefit taxation.
- Ancillary costs such as musical entertainment are deductible for the company with SEK 180 per person, excluding VAT twice a year. If the party is held at a place other than the company's place of employment, the company may, with a full right to deduct, pay for travel and hotels for an overnight stay in connection with the party in accordance with current rules for business travel.
- Family members and former employees who are invited to the Christmas table do not either risk benefit taxation.
Christmas dinner for customers
- Is a non-deductible expense for the company. On the other hand, deductions are allowed for simple meals and refreshments of lesser value if there is an immediate connection with the business.
Would you like to know more or get help interpreting what rules apply in your particular situation? Do not hesitate to contact one of our skilled consultants at Accountor.