The Swedish Government is about to make a decision regarding the much debated 3:12 rules, which dictates how much of their income, share holders in closed corporations can tax as personal income and as capital gains.
The suggested changes would, however, according to the Swedish trade organisation for accountants, auditors and advisers, FAR, create threshold causing efficiency losses and limited growth for close corporations.
Hence, FAR now presents an alternative proposal with changes designed to minimise such threshold effects.
Copenhagen Economics has assisted FAR with three things:
- Securing that the counterproposal minimises negative impacts on incentives for close corporation to invest and grow
- Calculated a critical ‘cut-off point’ where the number of firms affected by the new legislation is minimised
- Securing that the counterproposal is fiscally neutral
For further information please contact Senior Economist David Sundén