Christmas gifts tax considerations

As the holiday season approaches, it is time to review the tax rules that apply to Christmas gifts, staff events, and year-end appreciation. To help you navigate the season smoothly — and avoid unexpected tax consequences – we have summarised the key points every employer should keep in mind.

Christmas gifts for employees

• The tax-free Christmas gift may amount to a maximum of SEK 550 including VAT per employee.
• If the value exceeds this limit, the entire gift becomes taxable.
• The gift must be offered to all employees in order to be tax-free.
• Gift cards that can be exchanged for cash or used freely are not considered tax-free gifts.

Christmas party / holiday dinner

• A Christmas dinner is considered internal representation.
• VAT is deductible up to SEK 300 per person, but not beyond this.
• Otherwise, the general rules for representation apply, and a standard Christmas party or dinner typically falls within the acceptable limits without becoming taxable for employees, provided that the costs remain reasonable.

Christmas gifts to customers and suppliers

• As a general rule, gifts to customers and suppliers are not tax-deductible.
• A small representation gift of limited value may be deductible if it has a clear business connection, but the allowable amounts are low and the rules strict. Please consult your advisor if you feel unsure.

As we round off the year, keeping these rules in mind will help ensure that your holiday gestures remain both appreciated and compliant. Clear guidelines make it easier to plan gifts and events without unexpected tax issues. If any situation feels uncertain, reaching out to a tax advisor is always a wise step.