VAT deductions for business entertainment expenses
You are entitled to a VAT deduction for entertainment expenses that are directly related to your business. This applies to entertainment that is integral to business negotiations or staff welfare, for example.
To qualify for a VAT deduction, you must carry out VAT-liable business activities. Your expenses must be directly related to your business. Examples include expenses to initiate and maintain business relationships, or in connection with staff welfare or anniversary celebrations. Business entertainment expenses may be incurred in connection with a lunch or dinner, or a social gathering at which only drinks are served.
Business entertainment: VAT and deductions
Calculating deductions for lunch, dinner and light refreshments
You can use this e-service to calculate the VAT deductions you can claim on business entertainment expenses for meals and similar refreshments. You can also calculate the deductible amount for light refreshments in your income tax return.
You cannot use this e-service to make calculations for other types of business entertainment. The e-service calculates deductions on a “per person per occasion” basis. If you have been served both light refreshments and other types of meals, such as lunch or dinner, you need to make separate calculations for each type of business entertainment.
Calculating VAT deductions for meals and similar refreshments
You can include all food and drinks in your calculation, including alcoholic beverages. Select “Lunch/middag” (“Lunch/dinner”) under “Typ av representation” (“Type of business entertainment”).
Calculating deductions for light refreshments
You can include all light refreshments in your calculation. You can find out what’s included in the category light refreshments under “Claiming a deduction in your business’s income tax return”. The calculation shows the deduction you can claim in your income tax return, and how much VAT you can reclaim. Select “Enklare förtäring” (“Light refreshments”) under “Typ av representation” (“Type of business entertainment”).
The service is only available in Swedish.
Calculate your VAT deductions for lunch, dinner and light refreshments (in Swedish)
How much VAT can I deduct?
If you incur food and drink expenses in connection with business entertainment, your maximum VAT deduction basis is SEK 300 (excluding VAT) per person per occasion. This means that you can claim a maximum deduction of SEK 36 per person if your expenses are for food and non-alcoholic beverages only. This is because the rate of VAT on these goods is 12%, and 12% of SEK 300 is SEK 36.
If your expenses exceed SEK 300 excluding VAT for both food and alcoholic beverages, you must calculate your deduction on a proportional basis based on the actual expenses incurred (excluding VAT) for food and alcoholic beverages respectively. In some cases you can choose the standard deduction rate instead.
Apportionment of deductions
If your expenses for food and alcoholic beverages exceed SEK 300 excluding VAT, you must calculate your deduction on a proportional basis. This is known as apportionment. Your apportionment must be based on the actual expenses incurred (excluding VAT) for food and alcoholic beverages respectively on each business entertainment occasion. The maximum VAT deduction is 12% of the share of SEK 300 relating to food, and 25% of the share relating to alcoholic beverages.
Standard deduction rate
If both food and alcoholic beverages are included in a meal, you can choose the standard deduction rate instead of making a calculation based on your actual expenses. The standard deduction rate is SEK 46 per person per occasion provided that the expense exceeds SEK 300 (excluding VAT) per person. In addition, the VAT must amount to at least SEK 46 per person per occasion.
Example: Deduction for food and alcoholic beverages
A company has incurred expenses in connection with a business negotiation, amounting to SEK 1,758 in total for three people. These expenses included SEK 900 (excluding VAT) for food, and SEK 600 (excluding VAT) for strong beer. The restaurant charged SEK 258 in VAT (12% of SEK 900 plus 25% of SEK 600). The company runs a VAT-liable business.
Of the total expenses excluding VAT, a 60% share (900 ÷ 1500) relates to food and a 40% share (600 ÷ 1500) to strong beer. The company is entitled to claim a VAT deduction on a maximum basis of SEK 900 excluding VAT (SEK 300 × 3). Of this maximum basis, SEK 540 (60% of SEK 900) must be allocated to food and SEK 360 (40% of SEK 900) to strong beer. The company’s VAT deduction entitlement is therefore 12% of SEK 540 and 25% of SEK 360 – i.e. a total of SEK 154.80.
If the company chooses to apply the standard deduction rate instead, the deduction will amount to SEK 138 (SEK 46 × 3).
Staff party
A staff party constitutes internal business entertainment. The maximum VAT deduction basis for food and drink expenses in connection with a staff party is SEK 300 (excluding VAT) per person per occasion. If the expenses exceed SEK 300 per person, remember that various VAT rates may apply to the meal.
Peripheral expenses associated with staff parties
You can claim a VAT deduction on a maximum basis of SEK 180 (excluding VAT) per person per occasion for peripheral expenses associated with staff parties, such as the rental of tables and chairs, or musical entertainment costs.
Example: Furniture rental for a staff party
Axel has rented furniture for a staff party at a cost of SEK 7,000 excluding VAT. He runs a VAT-liable business. Axel's company has 50 employees, which means that the rental cost is SEK 140 (excluding VAT) per person. Since the VAT rate on furniture rental is 25%, he can claim a VAT deduction of SEK 35 per person (25% of SEK 140).
Theatre tickets, golf green fees, etc.
You can claim a VAT deduction for expenses such as theatre tickets or golf green fees, on a maximum basis of SEK 180 (excluding VAT) per person per occasion.
Example: Green fees in connection with a business negotiation
Annika runs a VAT-liable business. As part of a business negotiation, she has incurred expenses for golf green fees amounting to a total of SEK 1,950 for three people. Since a 6% VAT rate applies to green fees, she can claim a VAT deduction of SEK 10.80 per person (6% of SEK 180).
Business gifts
You can claim a deduction for business gifts on a maximum basis of SEK 300 (excluding VAT) per person. Business gifts include sending a bouquet of flowers, for example, to a customer in connection with the opening of their new branch, or their anniversary celebrations.
Example: Bouquet of flowers sent in connection with a customer's work anniversary
Arvid runs a VAT-liable business. He has sent his customer Elsa a bouquet of flowers costing SEK 650 for her company´s 30-year anniversary celebration. Since the VAT on flowers is 25%, Arvid can claim a VAT deduction of SEK 75 (25% of SEK 300).
Claiming a deduction in your business’s income tax return
You can only claim a deduction for light refreshments of minor value in your business’s income tax return. You can claim a maximum deduction of SEK 60 per person. If an expense exceeds SEK 60 per person, refreshments are not considered to be of minor value, so you cannot claim a deduction for them. Light refreshments include the following, for example
- non-alcoholic beverages
- coffee and tea
- biscuits and pastries
- fruit
- simple sandwiches that do not replace a meal
You cannot claim a deduction for alcoholic beverages. You cannot claim a deduction for lunch or dinner either, since these do not count as light refreshments.
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