Flexible working looks set to become the norm for most employers. But what about tax implications? Result helps you avoid the pitfalls.
Last year, directives came from the Public Health Agency: work from home if possible. This encouragement led many companies to facilitate remote working. Computer monitors, office chairs, and other necessary equipment were delivered to employees' homes. Now, a return to the office is on the horizon. Several companies are implementing some form of hybrid model, with a 60 percent office/40 percent home split being common.
Regarding tax-free work equipment, there are no new rules. The current rules are in Chapter 11, Section 8 of the Income Tax Act, says Pia Blank Thörnroos, legal expert at the Swedish Tax Agency.
Terms and conditions for home equipment
On the Swedish Tax Agency's website, it states: ”If you, as an employer, provide free work equipment to employees, you do not need to make tax deductions and pay employer contributions for these benefits under certain circumstances.”
However, this is associated with certain conditions. One is that the employer pays for the current equipment or service directly. This is how Pia Blank Thörnroos comments:
There is always an opportunity for employers to provide the work tools necessary to perform the job. If the work tool is necessary for the performance of the employment, the benefit has limited value to the employee, and the benefit to the employee cannot easily be distinguished from the benefit of the employment, the employer may provide technical equipment.
In plain terms, this means there should be no issues regarding computers, mobile phones, and screens in cases where the employee will also be working from home. Regarding desks and office chairs, it might require an individual assessment, as it cannot be generally stated that everyone working from home needs an adjustable desk or an office chair, she continues.
The employer must have ownership rights
Another aspect for it to be tax-free is that the employer pays for the equipment and the employee borrows it. Ownership must not transfer to the employee. The employer must also not give an employee financial compensation for their own purchase of equipment. In that case, it is considered expense reimbursement and tax deductions must be made, and employer contributions must be paid on the amount.
Remote working can also affect what is considered a place of employment. This, in turn, has effects on what constitutes a business trip or work trip.
If an employer enters into an agreement stating that an employee is to work more than 50 percent of their time for a longer period (one to two years) at a specific location outside their ordinary workplace, that specified location may become the employee's duty station. Since the employee's duty station is at a different location than the employer's premises, travel to the employer's premises is, for tax purposes, equivalent to a business trip, clarifies Pia Blank Thörnroos.
For employees who travel a lot for work, this is good to keep in mind.
From a tax law perspective, what would you say is most important when returning to the office?
- That you return the equipment you borrowed if you are no longer going to work from home, replies Pia Blank Thörnroos.
Charlotta Marténg
This article is published in partnership with Resultat
