Deductions for sponsorships

Sponsorships are fully deductible

The crucial thing for a company to be able to deduct the sponsorship from tax is that the company receives an appropriate consideration. There must be a reasonable ratio between the advertising value and the sponsorship contribution that the company makes to the club.

Advertising expenses

The part of the sponsorship which relates to the advertising benefit itself, the Danish Tax Agency considers as a general rule to be a fully deductible advertising expense, both for VAT and tax purposes.

This can be a mention of the company's name and logo on, for example, banner ads, seating, information boards, websites, in programs and newspaper ads.

Additional services

In connection with a sponsorship, the company often receives a number of additional services. These can be, for example, free tours and special performances, performances for sponsors, free membership, season tickets, VIP cards, free tickets, free participation in dining and events or sponsorship trips.

These services are also fully deductible, but are in principle not deductible in relation to VAT. This means that the individual company can not deduct VAT - but this is not a problem in relation to sponsorships in KVK as we are not VAT registered and thus do not endorse VAT on an invoice.

For more on additional services, read on