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VAT and tax deductions on business entertainment expenses
You are entitled to deduct VAT on entertainment expenses if the costs are directly related to your business. This applies, for example, when the entertainment is a natural part of business negotiations or staff welfare initiatives.
To be eligible for a deduction, your business must be liable for VAT or have the right to claim VAT refunds. Examples of entertainment expenses could include lunches and dinners, or mingles where only drinks are provided.
Calculate VAT and tax deductions for lunch, dinner and light refreshments
Deduction limitations (in Swedish)
Below you can calculate how much VAT you can be refunded for entertainment expenses for lunch, dinner or light refreshments. You can also calculate how much you are allowed to deduct in your income tax return. The service cannot be used to calculate other types of representation costs.
The service is temporarily down
The service is only available in Swedish at the moment, but we are working on updating the English version.
How much VAT you may deduct
If you have incurred expenses for food and drink in connection with entertainment, you may deduct VAT on a maximum cost of SEK 300 per person and occasion. This means you can deduct VAT up to a maximum of SEK 36 per person if the cost is only for food and non-alcoholic beverages, since the rate of VAT on these goods is 12% (12% of SEK 300 is SEK 36).
- If the cost of food and beverages, or beverages alone, does not exceed SEK 300 excluding VAT per person and occasion, you may deduct the entire amount of VAT.
- If the cost exceeds SEK 300 excluding VAT and is for both food and alcoholic beverages, the deduction must be calculated based on the actual costs excluding VAT for the food and alcoholic beverages. In some cases, you can choose to calculate the deduction based on a flat rate.
Calculating the deduction based on a flat rate (standard method)
If the meal includes both food and alcoholic beverages, you can calculate the deduction using a flat rate. According to the flat rate, you can deduct VAT at SEK 46 per person and occasion, provided that the cost exceeds SEK 300 excluding VAT per person. In addition, the debited VAT must be at least SEK 46 per person and occasion.
Tax deductions in the company’s income tax return
Expenditure on refreshments is deductible in the company’s income tax return in the case of light refreshments that cannot be considered as a meal and are relatively inexpensive. Examples include soft drinks, coffee, tea, biscuits, cakes, buns, fruit and simpler sandwiches that do not replace a meal. Tax deductions for light refreshments may not exceed SEK 60 per person and occasion..
Example
In connection with business negotiations, a company has spent SEK 1,758 on dinner for three people. The expenses include SEK 900 excluding VAT for food and SEK 600 excluding VAT for strong beer. The restaurant has charged VAT at SEK 258 (12% of SEK 900 and 25% of SEK 600). The company’s operations are VAT liable.
The total cost excluding VAT is SEK 1,500. Of this, 60% (SEK 900) is for food and 40% (SEK 600) is for strong beer. The company has the right to deduct VAT on a basis not exceeding SEK 900 excluding VAT (SEK 300 × 3). Of this amount, SEK 540 (60% of SEK 900) is for food and SEK 360 (40% of SEK 900) is for strong beer. The company therefore has a right to deduct VAT at 12% on SEK 540 and at 25% on SEK 360, i.e. a total of SEK 154.80.
If the company chooses instead to calculate the deduction using a flat rate, the deduction will be SEK 138 (3 × SEK 46).
A dinner does not count as light refreshments in this context, which means a full deduction cannot be made via the income tax return.
Expenses for demonstrations and exhibitions
You can deduct VAT on expenses for refreshments in connection with demonstrations and exhibitions, up to a maximum cost of SEK 300 excluding VAT per person and occasion.
Incidental expenses for staff parties
For incidental expenses related to staff parties, such as costs for renting tables or for music, you can deduct VAT up to a maximum cost of SEK 180 excluding VAT per person and occasion.
Expenses such as theatre tickets and golf course green fees
You can deduct VAT for expenses such as theatre tickets and green fees at golf courses up to a maximum cost of SEK 180 excluding VAT per person and occasion.
Different rules prior to 1 January 2017
If you wish to deduct expenses for entertainment incurred before 1 January 2017, you must calculate the deduction according to the rules that were in force at the time.
Bokför representationen
När du bokför representationen ska du också anteckna vilka som varit med vid representationstillfället och i vilket syfte du har haft representationen.
Gör momsdeklarationen
När du gör din momsdeklaration skriver du in summan av momsen du får dra av i fält 48.
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