On 26 May 2025, the Swedish Supreme Administrative Court ruled in favour of OneMed Sverige AB regarding the deductibility of consultancy fees and input VAT. OneMed had reimbursed its parent company for consulting services focused on cost reductions and operational improvements in preparation for a potential sale.
The Swedish Tax Agency and lower courts initially denied deduction, arguing the costs related to the sale process rather than ordinary business. The Supreme Administrative Court clarified that, although the consulting was initiated by the parent ahead of a sale, the services benefited OneMed’s own business operations. Expenses for efficiency measures are considered incurred "to acquire and retain income" and are therefore deductible. As for VAT, the Court stated that, since the costs for the consultancy services constitute an expense in OneMed’s business, a deduction should be allowed for the input VAT attributable to these expenses.
This judgment confirms that expenses aimed at improving a company’s cost structure—regardless of a future sale—may be deductible for both income tax and VAT purposes if they benefit the company’s business.
Key takeaway
Companies undertaking operational improvements in anticipation of a future sale may, in light of this ruling, generally deduct both consultancy fees and input VAT, provided the services directly benefit their business operations. The decision also paves the way for reassessment in cases where the Swedish Tax Agency has previously denied input VAT deductions for consultancy services aimed at cost reductions and operational enhancements.
Reference
- Swedish Supreme Administrative Court, joined cases 307-24 and 308-24
[View source.]
