Does your company know when representation is deductible and when it is not? Our experts provide answers to your questions about the rules for external and internal entertainment.
What is internal entertainment
Internal entertainment can include:
The company's staff or contractors, such as board members.
Examples of internal entertainment includes:
- Information meetings
- Staff parties
- Certain forms of entertainment towards group companies
What is external entertainment?
External entertainment can include:
- Meals, theater visits, golf games, etc., in connection with business negotiations
- It can also be entertainment for PR purposes, such as anniversaries
- Entertainment gifts are another example of deductible external entertainment, for which deductions are allowed up to 300 SEK excluding VAT, provided the gift is given to the customer during the entertainment event
Document the purpose of entertainment
Always document the purpose of the entertainment. The expense must have an immediate connection to the business. Is the cost for the dinner with the client directly related to the business negotiation? Are the same people who attended the meeting also at the dinner? Document who participated with names and companies, purpose, as well as the costs with receipts and dates.
Want to know more?
Do you want to know more about benefits and entertainment? KPMG's specialists have in-depth knowledge in the area and can help you review your company's routines and processes.
