New ruling regarding the possibility to invoice director’s fees from a private limited company

New ruling about director’s fees



Johnny Ekström

Auktoriserad skatterådgivare personbeskattning

KPMG i Sverige


In a decision that went against the Swedish Tax Authority’s (“STA”) current public guidance (issued in 2008), on the 21 December 2016 the Council for Advance Tax Rulings (in a 4-3 split decision) upheld that earlier more restrictive precedence from 1993 is applicable in determining whether a company director’s fees may be invoiced from a private limited company.

In order for the invoicing of a company director’s activities to be considered appropriate from a tax perspective, the Council for Advance Tax Rulings concludes that the invoiced activity must be limited in time and pertain to a particular assignment, as was the case in the Supreme Administrative Court decision RÅ 1993 ref.55.

The STA has appealed this decision. We also understand that the STA intends, not to change its public guidance until the Supreme Administrative Court has settled this issue.

Many companies have followed the current STA public guidance in order to determine the basis on which fees for a director’s activities may correctly be invoiced by a private limited company. In light of this decision from the Council for Advance Tax Rulings it is now unclear on whether this STA guidance is correct, and therefore also unclear under what circumstances a director’s fee may correctly be invoiced by and taxed within that director’s own private limited company. It is in our view of high importance that the Supreme Administrative Court settles this issue, in order to provide clarity and certainty for affected businesses.

If you have any questions regarding handling director’s fees and the potential impact of this decision we would be happy to support.

Link to the article in Swedish

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