Considerations for Christmas gifts to employees. Normally, all gifts to employees are taxable, but there are some exceptions, including Christmas gifts.

The Christmas gift must be of minor value to be considered tax-free for an employee. Minor value refers to up to 500 SEK per gift. If the value exceeds 500 SEK, the employee must pay tax on the entire amount, and the employer must pay employer contributions and withhold preliminary tax on the value.

Cash or gifts that can be equated with cash – e.g., gift cards that can be exchanged for money – are not tax-free gifts.

When calculating the value of a benefit, it should be based on the market value – i.e., if the company purchases the gift for 500 SEK and if the employees themselves would have bought the same item for 550 SEK, the market value is 550 SEK. Thus, the consumer price applies.

Christmas gifts to customers must also be of minor value to not be considered bribes.

Regarding Christmas Dinner:

Christmas dinner is covered by the rules for internal representation. The maximum amount for simple refreshments – such as cookies, buns, fruit, and simple sandwiches – is 60 SEK per person. Christmas dinner is not deductible. As for VAT deductions for meals (Christmas dinner), the maximum amount for expenses is 300 SEK. Christmas dinner is not taxable for the employee. If the employer sends the food home to the employees instead of having a joint Christmas dinner, it is considered a taxable benefit.

If employers wish to have a Christmas party, it is allowed by the Swedish Tax Agency to have two Christmas parties per year. Deductions are allowed for 180 SEK excluding VAT per person for the ancillary costs of the party (rental, performances, music, etc.).

Deductions are also allowed for costs for the employees’ family members, as well as for retired employees who participate.