Purchases Before Business Registration

When it comes to limited companies, specific rules govern the ability to deduct costs before business registration. To be eligible for deductions, purchases must have taken place after the formation of the company. The formation of a limited company is considered to have occurred when all founders have signed the memorandum of association (according to Chapter 2, Section 4, first paragraph of the Swedish Companies Act).

Business registration occurs after you have submitted the application to the Swedish Companies Registration Office (Bolagsverket) and received the registration certificate. This process usually takes place shortly after the company's formation. Therefore, the time span for deductible purchases and costs can be relatively short compared to sole traders, where deductions can be made for costs incurred in the calendar year before the business was registered.

Purchases Before the Formation of a Limited Company

In limited companies, it is not allowed to deduct costs incurred before the company's formation. A possible solution in this context is to have the limited company purchase the goods or services from you as an individual. When doing this, you must determine the value of the goods or services at market value, which is the price of the current goods or services at the time they are sold to the company.

It is important to note that VAT deductions cannot be made in this case. If you continue to use the asset privately, the use may be taxed as a benefit. Therefore, it is crucial to carefully consider how you handle costs before the formation of your limited company and ensure compliance with current rules and tax laws.