Deductible costsrepresentation
The general rule under income category Law (THE 16 Chapter 2 § ) is that “expenditure representation and similar purposes shall be deducted only if they have immediate connection with business activities, such as when it is exclusively a question of opening or maintaining business relationships or the like or in which the expenditure relates anniversary or staff welfare. The deduction can not exceed what is considered reasonable.” What is reasonable, determined by the Tax, see the amount of use.
A prerequisite for the allowance is granted is that the receipt or invoice states who participated (all), and the purpose of undertaking representation.
Non-deductible expenses representation
Both external and internal representation than those of the Tax faställda amounts represent non-deductible expenses.
This means that you have to adjust for these costs in calculating its taxable income. In short, it means higher taxes for company. (the skatteberäkning)
The following BAS accounts used for the recording of representation:
External Representation
6070 Representation
6071 Representation, deductible
6072 Representation, non-deductible
Intern representation
7630 Personalrepresentation
7631Personalrepresentation, deductible
7632Personalrepresentation, non-deductible
The above clarified by a few examples:
Example 1 – Internal and external representation
If a company's salespeople are out to dinner with an existing or a potential client and pays for the whole party going on 600 kr incl VAT so ar endast 180 kr a tax deductible expense (2* 90 kr) and 45 (2 * 22,50 kr) are deductible as input VAT.
The remaining 375 SEK is not tax deductible expenses and VAT, but can still be viewed as necessary costs for the retention or acquisition of the client.
If we assume that the payment of the bill in cash so recognized business event in the following way:
| Account and Title | Debit | Credit |
| 1910 Box | 600,0 | |
| 2641 Charged input VAT | 45,0 | |
| 6071 Representation, deductible | 90,0 | |
| 6072 Representation, non-deductible | 187,5 | |
| 7631 Personalrepresentation, deductible | 90,0 | |
| 7632 Personalrepresentation, non-deductible | 187,5 | |
| 600,0 | 600,0 |
Example 2 – Intern representation
A company organizes a party for their 50 employees so they rent a banquet room (20 000 kr exkl moms) and a local dance band (20 000 kSEK excluding VAT and hire a local restaurant CATRA dinner (500 SEK / person excl VAT).
The whole party goes on 65 625 kr incl VAT (52 500 kr + 13 125 )
Of the cost of the rent and dance band is only 180 SEK / person tax-deductible expense and 45 kr is avgdragsgillt as input VAT: 11 250 kr (9 000 kr (50 *180) + 2 250 kr of input VAT)
Of the cost of dinner is 90 SEK / person tax-deductible expense and 22,5 kr is avgdragsgillt as input VAT: 5 625 kr (4 500 kr (50 *90) +1125 SEK in the input VAT)
Of these total costs 65 625 kr is the only 13 500 kr tax deductible expenses and 3 375 kr deductible as input VAT.
The remaining 48 750 SEK is not tax deductible expenses and deductible input VAT , but can still be viewed as necessary costs for the company.
If we assume that the payments made in cash, as recorded business transaction in the following way:
| Account and Title | Debit | Credit |
| 1910 Box | 65 625,0 | |
| 2641 Charged input VAT | 3 375,0 | |
| 7631 Personalrepresentation, deductible | 13 500,0 | |
| 7632 Personalrepresentation, non-deductible | 48 750,0 | |
| 65 625,0 | 65 625,0 |