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6.3. Deduction of Cross-Border Payments and Non-Deductible Expenses

In general, costs not incurred for the production of taxable income are not deductible for Swedish tax purposes. Specific non-deductible costs include:

  • Bribes and other illicit payments;
  • Fines and penalties;
  • Entertainment expenses exceeding certain limits;
  • Dividends paid;
  • Capital losses;
  • Interest expense on certain subordinated debt securities in the financial sector governed by Regulation (EU) No 575/2013 on prudential requirements for credit institutions and investment firms;
  • Interest expense, subject to non-fulfillment of certain conditions (see Sec. 12.2.1.); and
  • Effective 1 January 2019, capitalization of interest expense incurred on the acquisition costs for machinery & equipment, building or land improvements.