Taxation on Participant Incentive Statement
Written by Tim Edmonds, COO, FeedbackFrog
March is tax declaration time, and thanks to a well-developed and automated system here in Sweden we can easily process our personal tax with simplicity. However, this does lead to some questions when participants see that FeedbackFrog ab has declared a source of income on their tax return form. This statement is to explain why this is the case and provide information to answer further questions on this matter.
What is Skatteverket’s position?
Skatteverket classifies taxable income as compensation that is provided in exchange for goods and/or services. This income can be in the form of cash (kontanter), or benefit (förmån), or a combination of cash and benefit.
When participating in a research panel you are providing your services to the company that facilitates the research projects, so any form of compensation you receive (either money or benefit) is counted as payment for the service you provide. This is required to be reported to Skatteverket and is subject to taxation related to the size and type of the compensation, and arbetsgivaravgift.
As a person receiving payment for participation in the form of a benefit, you will see in your annual tax return the total amount reported under Section 1.1, and the relevant tax level will be deducted by Skatteverket when that total amount is over 1000kr.
Should you have any questions or concerns regarding this position, please contact Skatteverket at: https://skatteverket.se/omoss/kontaktaoss.4.71004e4c133e23bf6db800079651.html
What is FeedbackFrog’s position?
At FeedbackFrog we confirmed our position as recently as Q4 2022, when we conducted a business review with Skatteverket and implemented BankID for the security of our Members, customers, and automation of regulatory reporting.
Since we pay participant incentives in the form of multi-use gift cards, classified as “annan förmån” by accounting regulations and viewed as a form of “privat levnadskostnad” by Skatteverket, you as a Member are not required to pay income tax on the value of the card; but it is required to be reported as a form of income and we do pay the related arbetsgivaravgift.
You will see everything we have reported for the financial year under section 1.1 of your tax declaration, and the relevant tax will deducted as part of your annual declaration when this value is higher than 1000kr.
If we paid participant incentives as cash, the compensation would be subject to income tax as well as reporting the income and paying the related arbetsgivaravgift.
When is a “gift card” not a “gift card”?
Skatteverket have clear rules for the receiving of gift cards from your employer as a gift, but only under certain circumstances, and expressly given as a gift over the top of any compensation for services rendered.
When you receive a gift card as a form of participant incentive for your participation in a research project facilitated by FeedbackFrog, these terms are not met and the gift card is viewed as form of payment for services, as explained above.
This is why we refer to the gift card as participant incentive, to differentiate between the legal definitions of what is and isn’t a gift card. More information on what is considered a gift can be found here: https://www4.skatteverket.se/rattsligvagledning/edition/2024.1/324258.html
Why don’t other online research panel providers report our compensation to Skatteverket?
We at FeedbackFrog we take pride in our work, and we take every step to deliver our work in the right way. We treat the safety, security, and transparency of our business operations with the utmost respect and conduct our business in a fully regulatory compliant way. Since our business is built around the handling of sensitive data, we do not compromise on quality of service, and conduct regular internal audits to ensure we follow all relevant regulations.
We have no comment on how other online research providers in the Swedish market conduct their business operations.
