The government has requested a study of the “3:12 rules” that limit the ability of closely-held or family-owned companies to pay preferentially-taxed dividends, instead of higher-taxed employment income, to its owners.
In particular, the government has requested that the study:
- Analyze how the 3:12 rules can be changed to improve conditions for small to medium-sized enterprises, particularly in terms of their ability to grow, employ and attract capital (including reviewing the outsider rule and the provision on the same or similar activity)
- Analyze how the 3:12 rules can be simplified in order to facilitate changes of ownership, both between related parties and to staff
- Analyze whether the taxation of transfers of ownership between related parties and to staff is neutral in relation to the disposal of qualified shares to other subjects and, if not, how the rules can be changed to make the taxation more neutral
- Review the rules on the calculation of the salary base in case of share changes and suggest any necessary changes to those rules
The government would like the study to find a balance between the need to promote entrepreneurship and the purpose of the 3:12 rules and include proposals for appropriate constitutional amendments to the 3:12 rules. The study is due by 29 March 2024.
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