Taxation and deductions for Christmas parties

As an employer, you have a full deduction even if you choose to hold the Christmas party outside the company or with accommodation.

It's not a condition that the Christmas party has to be held at the workplace. Christmas parties can also be held in restaurants or perhaps virtually, as many did during COVID-19.

If the company fully or partially covers the cost of the Christmas party, employees are not taxed. This applies even if it's not held physically or anywhere other than the workplace. And as a company, you still have a full deduction because it's a staff expense.

Who can you bring to the Christmas party?

Basically, anyone can attend the Christmas party. However, a good rule of thumb is that if the participants attend for natural reasons, the employees are not taxed. This could be close business partners or children and spouses.

We still host the Christmas party virtually

Last year, several companies decided to hold their Christmas party virtually, and this is still possible. Wine, entertainment, food, etc. can be ordered directly to employees' homes or for smaller groups.

Christmas lunch at a hotel

If you hold the Christmas party at a hotel, with accommodation and breakfast, it is also tax-free for the employee and deductible for the company.

What about the price?

There are no clear rules on what the cost of a Christmas party can be. So whether the Christmas party is held at McDonald's or Noma, your employees will not be taxed.

Do you need help?

You are also welcome to contact us by phone +45 3929 0800 or write to us buusjensen@buusjensen.dk