The ability of legal entities to make donations for public-benefit purposes has long been a topic of discussion. Under current regulations, such donations often have tax implications for both the company and its shareholders, limiting the ability to contribute. The Swedish government believes that tax rules encouraging donations from legal entities could increase resources for socially beneficial activities. Therefore, the 2026 Budget Bill proposes new tax rules for donations made by legal entities.
At present, legal entities – such as limited companies – are neither entitled to a deduction nor a tax credit for donations made to public-benefit causes. In addition, a donation may result in the shareholders of the legal entity being taxed on the value of the gift.
Government proposal on tax incentives for donations from legal entities
The government proposes that companies should be eligible for a tax credit on donations made to approved recipients that support social welfare activities or scientific research. The proposal, which is included in the 2026 Budget Bill, aims to strengthen incentives for legal entities to contribute to socially beneficial purposes. The new rules are proposed to take effect on 1 January 2026.
To qualify for the tax credit, the donation must be made to a so called approved recipient whose purpose is to promote social welfare activities or scientific research. Donations aimed at supporting other public-benefit purposes will therefore not qualify for the tax credit.
The tax credit corresponds to the corporate tax rate of 20.6% and applies to companies subject to state income tax – such as limited companies and economic associations.
To qualify for the tax credit, a donation must:
- Be made in money (in SEK or another currency)
- Amount to at least SEK 2,000 per donation occasion
- Not exceed a total of SEK 800,000 per calendar year
This means a company may receive a tax credit of up to SEK 164,800 (800,000 × 20.6%) per calendar year.
The government also proposes that donations from legal entities qualifying for the tax credit should not result in any tax consequences for the shareholders.
Questions about the proposed rules?
The proposed rules on donations from legal entities open up new opportunities to contribute to the public good while also raising questions about how such donations should be handled.
Is your company considering making a donation and wondering how the new rules might affect you? Are you a non-profit organization wanting to inform your donors about the potential for tax credits?
At Azets, we are happy to help both companies and organizations understand how the new rules may affect you and how you can best take advantage of the opportunities they bring. Whether you’re planning to give, receive, or simply want to know more about the new donation tax credit, you’re welcome to contact us.