Deduction of costs in trading or limited partnerships
All costs necessary to run the business are deductible. This means that you can deduct costs related to the business you are running.
Machinery and other equipment
As a general rule, you should not deduct expenses for machinery and other equipment directly. Instead, the company does depreciation (decrease in value). This means that the company can deduct the cost of the purchase by dividing it over several years. In this way, the inventories are expensed at the rate they are consumed. There are two different methods of depreciation: depreciation as recorded in the books and residual value depreciation.
Expenses may be deducted immediately if the equipment has an economic life of three years or less or if the value is less than half a price base amount.
Some costs are not deductible
Some costs are not deductible, even though they are part of the business activity. Examples include:
- personal living expenses
- fines
- income taxes
- late tax payment charges
- penalties
- tax surcharges and late fees
- fees under the Work Environment Act and Working Hours Act
- damages under the Co-Determination in the Workplace Act (MBL)
- membership fees
- meal costs in connection with business entertainment
- costs of setting up and registering the company.
Amounts and percentages at the Swedish Tax Agency (in Swedish)