ARTICLE · 23 OCTOBER 2026

Extended Deduction Right For Sponsorship Expenses

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The Swedish Ministry of Finance has proposed expanding tax deduction rights for sponsorship expenses, moving away from restrictive case law that required direct business connections. Under the new framework, companies can deduct expenses aimed at improving or maintaining business reputation, including long-term brand value and competitive positioning, without needing to demonstrate concrete effects.

SwedenTax

Ebba Perman Borg

Victor Elovsson

On 18 June 2026, the Swedish Ministry of Finance presented its referral to the Swedish Council on Legislation regarding an extended right to deduct expenses for sponsorship and similar measures (see the referral here). The referral is based on the inquiry report presented in January 2026 (SOU 2026:5).

There is currently no express statutory rule on the deductibility of sponsorship expenses. Under case law (RÅ 2000 ref. 31), deduction requires that the sponsor receives consideration of corresponding value or that there is a sufficiently strong connection between the sponsorship and the sponsor’s business. Goodwill effects alone have not been sufficient, and the position has long been regarded as restrictive.

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