Representation – deductible representation – costs for both the internal representation and external representation are deductible under certain conditions. If you have represented to your customers or your employees (staff representation) you can if certain requirements are met may deduct for your entertainment expenses.
Representation of the 16 Chapter. 2 § THE
“2 § Expenditure on entertainment and other purposes shall be deducted only if they have been immediately connected with the business activity, 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 may not exceed what is considered reasonable. The cost of lunch, dinner or supper, the deduction may not exceed 90 crowns per person per meal plus VAT to the extent that it should not be deducted under 8 Chapter. or refunded under 10 Chapter. VAT Act (1994:200). Create (2007:1419).”
As shown in the text of the law is a fundamental requirement that there must exist a direct link for it to be authorized by the representation. In order to claim a deduction for expenses related to entertainment and similar purposes, deductions are allowed only if there is a immediate connection with the business activity. In addition, the deduction may not exceed what is considered reasonable, as determined by the decisions in which a deduction is not allowed for luxurious representation (cf RAW 1970 ref. 21 and RAW 1983 1:22).
For representation in commercial negotiations shall be deemed to have direct link with the activity should be included as a representation framework of the negotiations (there is a temporal association – timing of representation held is important for assessing). The representation should thus express in these contexts, customary hospitality, t.ex. in the shape of hospitality at the opening of business negotiations, In such or as a termination of negotiations.
What is considered to be directly connected with the business activity is assessed based on the circumstances of each case. This assessment takes into account differences between firms, pursuit of activities, form of representation, and on how many occasions that representation has been. Those mentioned are initiating or maintaining business relationships, anniversary and staff welfare.
Examples of situations in which direct link may exist is also larger anniversaries, inaugurations, demonstrations and the like where representation is used as part of the company's marketing and public relations. If representation is exercised in connection with the taxpayer or the employee's personal feast However relief in respect. Thus, reductions should not be allowed for expenses related to such. party of business friends adjacent to taxpayer fiftieth birthday.
Deductions are allowed for:
- Lunch, noon, supper
- Other costs meal (t.ex. breakfast, coffee, brunch, mingle)
- Theatre Ticket / green fee charge for golf games, etc.:
Deductions are allowed not to:
- Personal hospitality
- Expenses reimbursed through expenses or paid through the company's card, etc..
- luxurious representation
Deduction Amount – reasonable amount – VAT
In 16 Chapter. 2 § IL anges bl.a. that the deduction may not exceed what is considered reasonable. The cost of lunch, dinner or supper, the deduction may not exceed 90 euros per person per meal plus VAT to the extent that it should not be deducted under 8 Chapter. or refunded under 10 Chapter. VAT Act (1994:200).
When the representation to other meal costs, other than lunch, dinner or supper, reductions should be allowed a maximum 60 per person. Reasonable deductible expense e.g.. for theater ticket or, the external representation, for green fees at the golf game may be considered a maximum 180 kr/180 SEK plus VAT per person.
Here you can see what the current deduction amount is equal to the income year in – deductible representation
Deduction framework should be applied at each time representation for the. A cheap entertainment at one time should not be offset against representation at another time, where expenditure exceeded the deduction under.
If you are not liable for VAT, you may deduct a maximum of 90 SEK plus VAT, which means that part of the meal cost you less. Although the representation to the anniversary or the non-Nordic people, we must not make the higher deduction.
If you had expenses for such as theater tickets or green fees at the golf game, you get a deduction of up to 180 per person. If you are not liable for VAT, you get a deduction of up to 180 SEK plus VAT, which means that part of the expense you can deduct.
If you represent against your employees, so-called internal representation, the same amount of frames that the external representation. If at such. an office party has incurred costs for rent, musical entertainment or behavior, you can deduct a maximum of 180 per person. If you are not liable for VAT, you will also deduct any VAT payable on 180 SEK.
Representation and alcohol – deductions legal
Costs for wines and spirits may be included in deductible. There is no deductible for alcohol, but net framework should mainly apply to food.
Examples of deductible and non-deductible external representation:
– Affärsförhandlingar
– Representation by PR purposes
– Anniversary
– Inauguration of the facility mM.
– Demonstrations
– Views
– Information directed to the media and customers
– Christmas Lunch (Christmas Dinner) and crayfish for corporate customers – General with the company's business relationships and customers.
Read more about each here: Examples of deductible and non-deductible external representation
Examples of deductible and non-deductible internal representation
– Staff Celebrations (Christmas Dinner, Christmas lunch and crayfish) and the peripheral (local and Entertainment)
– Information sessions for employees, planning meetings, Financial meetings, discussions about purchasing- and sales policies, office party.
– Internal courses, conferences, etc..
– Kick-off
– Teambildning
– Board,
– Audit
– Annual General Meeting
– General meeting
Read more about each here: Examples of deductible and non-deductible internal representation
Recurring representation – same person or group of persons – personal hospitality
Caution should be exercised when often regular representation against the same person or group of persons. In such representation, there may be elements of personal hospitality that exclude deduction. With respect to persons other than those that are directly related to business negotiations should be spending for such representation, not be deductible.
Representation outside activity destination – immediately there is no connection
Even in the choice of the place where representation is exercised caution should be exercised. So, for example. representation in a place other than place of business may be a sign that the direct link is missing.
Luxurious representation
Of the practice shows that relief in respect of luxurious representation. Learn more about luxurious representation
Representation in the form of gifts - representations gifts and promotional gifts
Things to consider in connection with the representation
As a rule of 3 Chapter. 5 § layer (2001:1227) on tax returns and verification, LSK, the person who reported income in income from business operations for each business to provide the information needed for tax purposes, such as information about income and expenses. Of Chapter 19. 2 § LSK clear obligation to a reasonable extent by the accounts, notes or other appropriate means, ensure that there is evidence to fulfill the reporting obligation and to control it., the person who reported income in income from business operations for each business to provide the data needed for assessment, t.ex. information about income and expenses. By 19 Chapter. 2 § LSK clear obligation to provide reasonable by accounts, notes or other appropriate means, ensure that there is a basis for fulfilling the obligation and the monitoring of the.
The taxpayer should be through note on restaurant bill or similar receipts showing the representation of expenditure size, able show the relationship between the people involved in the representation and the taxpayer's trade activity. This can be done by the journal noted, including the date of Representation, Name, professional or corporate function for all persons against whom the representation is exercised and the company or companies they represent and the purpose of representation. Data on receipts should be recorded on permanent basis.
In the case of deductions for expenditure on entertainment in the home, the corresponding data recorded for each representative the opportunity. If the deduction claimed for entertainment at home or in the taxpayer's business premises should be an equitable assessment of the size of the deduction on the basis of, the study.
Subsistence
Has allowance paid in connection with the representation should traktamentsavdraget reduced as follows.
Domestic: Reduction of: The standard deduction for the increased cost of living:
210 kr 147 kr 105 kr 63 kr
Breakfast, lunch and dinner 189 kr 132 kr 95 kr 57 kr
Lunch and dinner 147 kr 103 kr 74 kr 44 kr
Lunch / Dinner 74 kr 51 kr 37 kr 22 kr
Breakfast 42 kr 29 kr 21 kr 13 kr
Foreign:
Completely free diet 85 %
Lunch or dinner 35 %
Lunch and dinner 70 %
Breakfast 15 %
Learn more about representation in the Tax Agency : IN A 2004