Tax rules for gifts

When it comes to tax rules for gifts from employers to employees, the main rule is that these gifts are taxable. However, it is important for employers to be aware of the exceptions that exist. These exemptions mean that certain types of gifts, such as Christmas gifts, anniversary gifts and commemorative gifts, may be tax-free under specific conditions. Keeping track of this is important to ensure that both employers and employees comply with the applicable tax laws and regulations.

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Types of gifts

Christmas Gifts

Christmas gifts to employees that do not exceed a value of 500 SEK including VAT are considered tax-free. It is important to note that in this amount the costs of the employer for the administration and transportation of the gifts are not included.

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Anniversary Gifts

These gifts are given to employees when the company celebrates major anniversaries such as 25, 50, 75 or 100 years. In order for these to be tax-free, their value must not exceed SEK 1,500 including VAT. It is important to note that a tax-free anniversary gift can only be given from the 25th anniversary of the company and no more often than every 25 years thereafter.

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Commemorative gifts

Gifts given to permanent employees on special occasions, such as on even birthdays from 50 years and above, after at least 20 years of employment, or upon termination of employment. These gifts are tax-free if their value does not exceed SEK 15,000 including VAT and they are not given more than once, except upon termination of employment. An employee is considered to be a permanent employee if the total length of employment is at least six years.

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Gift Card

‍Gift cards that cannot be exchanged for money can be counted as tax-free gifts. On the other hand, gifts in the form of money or similar means of payment, such as checks, postal bills and gift cards that can be converted into cash, are always taxable.

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Gifts for charity

‍The treatment of gifts to charity differs depending on whether they are given instead of a salary or as a Christmas gift. This distinction is important to avoid unexpected tax effects.

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Sponsorship Package

Some companies offer sponsorship packages along with Christmas gifts, which can include anything from advertising signs to free tickets. These parcels must be evaluated individually to determine their tax status.

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Deduction of costs and VAT

As regards deductions for costs and VAT on gifts to employees, employers may deduct the costs of such gifts, whether or not they are taxable to the recipient. If the gift is taxable to the employee, the employer must pay employer contributions at the market value of the gift and can thus deduct these contributions. The employer also has the right to deduct input VAT on the purchase of gifts, as long as the benefit is tax-free for the employee in the case of income taxation.

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Other gifts

In addition to Christmas gifts, anniversary gifts and commemorative gifts, there is also the possibility of giving employees gifts of a simpler kind as part of employee care benefits. These can, for example, be given on personal occasions such as birthdays or weddings. A typical gift in this context can be something as simple as a bouquet of flowers. However, it is important that similar gifts are offered to all employees on corresponding occasions, for example, on the birthdays of all employees.

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Conclusion

Giving gifts to employees is not only a way for you as an employer to show appreciation, but also an area that requires some attention to the tax code. However, by keeping track of the rules, you as a company will be able to reward your employees without incurring unwanted tax consequences.

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FAQs

How to post Christmas gifts to employees in the accounts of the company?

Christmas gifts that are tax-free are recorded as a regular expense in the company's accounts. If the gift is taxable, you must also post employer contributions and any tax.

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Is there a difference between tax rules for gift cards and cash bonuses?

Yes, gift cards that cannot be exchanged for cash can be tax-free, while cash bonuses are always taxable.

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Can I deduct VAT for gifts to employees?

Yes, you have the right to deduct VAT on purchases of gifts as long as they are tax-free for the recipient. If the gift is taxable, you can not deduct the VAT.