Sweden: Guidance on application of “3:12 rules” in cases of significant outside ownership

Supreme Administrative Court preliminary ruling providing additional guidance on application of the “3:12 rules”

Supreme Administrative Court preliminary ruling providing additional guidance

The Supreme Administrative Court (HFD) issued a preliminary ruling providing additional guidance on application of the “3:12 rules,” which limit the ability of a closely-held or family-owned company to pay preferentially-taxed dividends (instead of higher-taxed employment income) to its owners, when outsiders own a significant stake in the company.

Under the so-called “outsider rule,” if at least 30% of a company’s shares are held by passive owners, the shares held by active shareholders are subject to the 3:12 rules only if there are “special reasons.” The court examined conditions in a shareholder agreement providing for conditional contributions, principles for distribution of profits, and limitations on certain major cost increases, and found that such conditions did not constitute special reasons to apply the 3:12 rules.


The government is conducting a study of the 3:12 rules to review how the rules may be changed to make the special relief rules for so-called qualified employee options more effective in attracting and retaining key talent. The report is due by 31 May 2024. Read TaxNewsFlash

Read a February 2024 report (Swedish) prepared by the KPMG member firm in Sweden



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