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Deduction of costs in limited companies

All costs necessary to run the business are deductible. This means that you can deduct all 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. 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.

Expenditure on premises

If your limited company needs a premise and you rent out a specifically defined space in your home to the company, this is a deductible cost in the company. As the owner, you are taxed in the income category capital for the market-rate rental income when it relates to a real rental relationship. You may make a reasonable deduction for the actual additional costs incurred as a result of the rental.

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)