R&D Deductions in Sweden During the Summer: What You Need to Know

Summer in Sweden is a time for rest, vacations, and time away from the office. But for companies that apply for the R&D deduction (FoU-avdraget), the summer months can bring complications, especially when employees working with R&D are off on paid leave. How do vacations or absences affect your deduction claims? And what should you watch out for? 

Let’s walk through the rules, a commonly overlooked exception, and the potential risks if you miss the details. 

What Is the R&D Reduction? 

Swedish employers can receive a reduction in employer contributions (arbetsgivaravgifter) for employees who spend at least 50 percent of their actual working time on qualified R&D work. This relief can lower personnel costs considerably, but only if the conditions are met on a monthly basis and for each employee individually. 

What Happens During Summer Absences? 

It’s easy to assume that if an employee is on vacation or parental leave, the deduction cannot be claimed. But that’s not always the case. There is a helpful exception for situations where an employee is away from work for a full calendar month due to vacation, illness, or parental leave and still receives salary. 

In such cases, the deduction can still be applied for that month provided the employee qualified for the R&D deduction during each of the four immediately preceding calendar months. This detail is often overlooked, especially during the holiday period, but it can make a significant difference when calculating your personnel costs. 

However, if the employee is not away but instead assigned to other work that is not R&D-related during the month, the deduction cannot be claimed, regardless of previous months. 

What About Partial Vacations? 

When an employee is only on vacation for part of a month, things get a bit more nuanced. To qualify for the deduction in these months, the employee must spend at least 50 percent of their actual working time and at least 15 hours on R&D activities. 

If that threshold is not met, the deduction may still be granted if the employee met the standard deduction requirements in each of the four previous months. 

These conditions are especially important to track during the summer when working hours vary and teams often fill in for each other or shift responsibilities. 

What Are the Risks? 

The main risk is making incorrect deduction claims during months when the eligibility criteria are not met. This can result in demands to repay the deduction with interest. Another common issue is missing out on eligible deductions because the exception rule was not applied, often due to a lack of documentation or awareness. 

Accurate monthly time reporting is key. Without clear records showing which employees were involved in R&D work, for how long, and when, it becomes difficult to justify the deduction in case of a review by Skatteverket. 

In Summary 

The R&D deduction is a valuable cost-saving opportunity, but summer absences require special attention to ensure everything is handled correctly. Planning ahead and keeping close track of working hours and activities can help you stay compliant and avoid missing out on deductions you are entitled to.