{"id":3136,"date":"2022-11-21T15:32:37","date_gmt":"2022-11-21T13:32:37","guid":{"rendered":"https:\/\/www.accountfactory.com\/?p=3136"},"modified":"2022-11-21T15:32:37","modified_gmt":"2022-11-21T13:32:37","slug":"giving-to-charity-from-your-company","status":"publish","type":"post","link":"https:\/\/www.accountfactory.com\/en\/blog\/giving-to-charity-from-your-company\/","title":{"rendered":"Giving to charity from your company"},"content":{"rendered":"

We regularly get questions about giving money to charity from the company. So what’s the deal – is your company allowed to give money to charity?<\/p>\n

Giving is OK, but not tax-deductible<\/h2>\n

In brief, a company can absolutely give to charity, but it’s normally not tax-deductible in the company’s tax return. This means that for an\u00a0enskild firma<\/em> or a\u00a0handelsbolag<\/em> there’s no point (tax-wise) in letting your company giving to charity as opposed to giving privately.<\/p>\n

For an aktiebolag<\/em> the cost is also not tax-deductible, so you can say that you’re giving away the company’s taxed profits. But if you had instead paid yourself dividends, paid tax on these and then<\/em> given the money to charity, there would obviously have been less to give away. So for an aktiebolag there is actually a point in giving to charity from your company instead of privately. However,<\/em> note the risks below.<\/p>\n

Giving is sometimes taxed<\/h2>\n

It is not always crystal clear and risk-free to have your company give to charity. For a small-company owner Skatteverket could very well say that the owner gives to a charity that is dear to him\/her personally, but does it from the company instead to avoid taxes. And then they would probably say that the owner should be taxed for this. Just like if the company had paid the owner’s rent (which is taxed), they can say that the company pays the owner’s gift to charity.<\/p>\n

If an employer gives to charity in\u00a0its employees’ names<\/em> (e.g. as a Christmas gift), this is also taxed for by the employees. However, if the company gives to charity in its own name (e.g. instead of giving Christmas gifts), this is usually OK.<\/p>\n

So can you know for sure when it’s OK for a company to give to charity and when it’s not? Although it’s not always easy to say, in general I’m guessing that the more the company can be seen as an “extension” of the owner (e.g. a one-person company), the greater the risk for taxation. While for a bigger company with employees that e.g. gives to charity instead of sending Christmas cards, I think the risk is quite small.<\/p>\n

Giving dividends to charity<\/h2>\n

It’s also possible to give your dividends to charity\u00a0without<\/em> first paying tax on them, both dividends from listed stock and from your own company. The website Aktieg\u00e5van.se<\/a> has more information about this.<\/p>\n

Also see Pwc’s blog Sk\u00e4nk din utdelning till v\u00e4lg\u00f6renhet \u2013 s\u00e5 funkar det!<\/a> (in Swedish).<\/p>\n

Tax reductions for individuals<\/h2>\n

Individuals can get tax reductions for certain gifts. You can get a tax reduction with 25% of gift amounts up to 12 000 SEK per year (until 2021 up to 6 000 SEK), with the following conditions:<\/p>\n