Deduction of costs in limited companies

Machinery and other equipment

As a general rule, you should not deduct expenses for machinery and other equipment directly. You should instead allocate and deduct the expenses over several years. This is called depreciation. 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)