According to Abba: The Official Photo Book, published to mark 40 years since they won Eurovision with Waterloo, the band’s style was influenced in part by laws that allowed the cost of outfits to be deducted against tax – so long as the costumes were so outrageous they could not possibly be worn on the street.
I think it’s a case of the outfits essentially being akin to a work uniform. You wouldn’t wear it on the street, and you need it for work (as I guess stage and screen actors do too), and due to that you can claim it as a work expense and is tax deductible?
I think that’s it, yeah. This way they avoided paying tax on their costumes.
I think it was even better than that. It wasn’t just the tax on the costume, it was the entire cost of them could be deducted from their tax bill. The more extravagant and expensive, the smaller that years tax bill!