More detailed information about the new rules on keep-fit contributions
In connection with the Swedish Tax Agency removing golf, slalom, etc. from the former “banned list”, another change was also implemented that was not quite as obvious.
The Swedish Tax Agency now differentiates between what is known as a benefit in kind and a keep-fit contribution. A benefit in kind arises if the employer offers a keep-fit activity on its own premises or on specially designated premises for which the employer pays directly. If the employee pays for a keep-fit activity himself/herself and is then compensated by the employer upon presentation of a receipt, this is defined as a keep-fit contribution. A keep-fit contribution may not exceed SEK 5,000 in order to be tax-free. A benefit in kind, by contrast, is tax-free with no limit.
X AB is a small company in Stockholm that always offers its employees an exercise pass as a tax-free keep-fit benefit. Many employees choose to buy an annual pass for the SATS chain of gyms, which costs around SEK 7,000 in Stockholm. X AB has compensated its employees for this cost upon presentation of a receipt. In the past there was no limit on the amount, and the annual passes represented a tax-free benefit for employees and a deductible expense for X AB, as SEK 7,000 was considered a normal cost for a gym pass at that location.
If X AB is to be able to continue to offers its employees keep-fit activities for 2018 on the same terms as before, the employer itself must pay for the gym passes directly, i.e. using its company card. If employees themselves pay for the passes and are then compensated by the company, only expenses up to SEK 5,000 are counted as a tax-free benefit and a deductible expense for the company. Any surplus amount will be considered to be a taxable benefit, i.e. it will be taxed as salary.
It is important to remember that even if the benefit in kind does not have a limit, the keep-fit activity must still be of a simple nature. It is not possible, for example, for the employer to offer a pass for a gym that also includes, for example, breakfast, free towels, skincare products, etc.
Another important aspect emerging from the statement of position is that a keep-fit activity that costs SEK 1,000 or more for one single instance cannot be counted as a keep-fit activity of a simple nature. It is not possible, for example, to claim a green fee of SEK 1,200 for one game as a tax-free employee benefit.