Sponsorship from a tax perspective – current rules and proposed changes
Sponsorship has become an established part of many companies’ marketing and relationship‑building activities. At the same time, it is an area where the tax rules are often perceived as both complex and difficult to interpret. The central question is the extent to which a company may deduct sponsorship costs and what requirements apply regarding documentation and the provision of a counter‑performance. On 19 January 2026, a government report was submitted highlighting, among other things, the need for clearer guidance and modernised rules, making the issue more topical than it has been for some time. The proposed rules are intended to apply from 1 January 2027.
From a tax perspective, sponsorship is essentially regarded as a form of marketing. For the cost to be deductible, it must be commercially justified and the company must receive a concrete counter‑performance that can be valued at market price. It is therefore not sufficient for a company simply to wish to support an activity or organisation – there must be a clear link between the cost and the company’s ability to generate revenue. Logo exposure, the right to use the partnership in marketing, or access to events are examples of counter‑performances that are normally accepted.
Common pitfalls in sponsorship
The counter‑performance requirement is also the reason why many companies find themselves in grey areas. If the counter‑performance is too vague, symbolic, or difficult to value, the sponsorship risks being classified as a gift, which is not deductible. This places high demands on documentation. Agreements should clearly describe what the sponsor receives in return, how the value has been calculated, and how the counter‑performance has actually been delivered or used. In practice, this means that companies need to work systematically with follow‑up, for example by retaining material showing exposure, attendance, or other tangible effects.
A common mistake is that companies deduct the full contractual sponsorship amount without assessing and valuing the counter‑performances actually used. This may lead to significant consequences in a Swedish Tax Agency audit, where previously claimed deductions may be denied and reclassified as non‑deductible costs, and tax surcharges may be imposed.
Risk of benefit taxation
Sponsorship may also have implications for the taxation of employees. Structured documentation and well‑designed routines are necessary to demonstrate that counter‑performances have been used for business purposes. A common example in sports sponsorship is that the sponsoring company receives match tickets as part of the agreement. If these are used privately by employees, a taxable benefit arises, valued at the market price – that is, what the employee would have paid for the ticket. Employees may also bring family or friends. If so, an indirect benefit also arises, meaning the employee must be taxed on the total number of tickets received from the employer.
If the employer does not have sufficient documentation, the Swedish Tax Agency may assume that all tickets received have been used privately. The employer may then be liable for employer contributions on the full value of the tickets received from the sponsored organisation, and tax surcharges may also be imposed.
Proposed changes
The report notes that although the current rules are clear in principle, they often lead to uncertainty because sponsorship is not regulated in a specific statute but handled through case law and general tax principles. It is therefore proposed that the guidelines for deductibility be clarified, including a definition of what constitutes a counter‑performance and what documentation requirements should apply. Such changes could reduce the risk of arbitrary assessments and create greater predictability for both companies and recipients.
Another issue raised is the valuation of counter‑performances. At present, it is common for companies and recipients to estimate the value themselves, but without clear guidance the assessments may vary significantly. The report suggests that the Swedish Tax Agency could develop indicative valuation models or examples, which would make it easier to determine whether a sponsorship agreement is reasonably structured.
Regardless of how the new rules are ultimately formulated, robust routines are essential to ensure that sponsorship agreements are clear. It is important that follow‑up and valuation of utilised counter‑performances are carried out to determine what is deductible and what is not, and that an assessment is made of whether benefit taxation is applicable, with appropriate documentation.
If you need assistance with matters relating to sponsorship, get in touch and Azets’ experts will be happy to help.
