Justified concern regarding the new 3:12 regulations

Now there is one month left before the proposed new regulations applying to owners of closely held companies, the 3:12 Committee report, is to be presented.

The Committee was established in March 2014 with the assignment of reviewing ownership changes in closely held companies. In January 2015, the Committee received a supplementary directive in which the Government requested a larger overview of the regulations, the so-called 3:12 regulations. The proposal is to be presented no later than 1 November 2016.

Naturally, interest regarding the Committee’s proposal is strong, as is the interest in its possible effects. We note concern amongst our clients that the proposed rules will lead to a deteriorated tax situation. This is because the supplementary directive specifically states that the Committee is to present proposals for changes in the 3:12 rules, which are appropriate in terms of limiting fiscal income transformation, that is, transformation of highly taxed employment income to low taxed income from capital. More stringent 3:12 regulations according to the above will, with all probability, result in a deteriorated tax situation for many entrepreneurs and family owned companies.

We have reported in previous postings on the issues the Committee is looking at and where we can expect changes. In addition to the original assignment to review ownership changes in closely held companies, the Committee is also to, amongst other things, analyse the following issues:

• size of and premises for calculating the standard amount applied in the simplification rule (today, SEK 159,775 if the owner has qualified shares),
• amount and premises for calculating the salary-based limit (today 50 percent of paid out salaries presuming the salary requirements are fulfilled)
• regulations regarding saved dividend capacity (today, no limitation)
• tax rate on dividends and capital gains within the threshold amount (today, 20 percent)

When the Committee has presented its draft proposal, it will be sent for consultation. The proposal must be approved by Parliament prior to any possible changes in legislation coming into effect, which will probably imply that no major changes will come into effect before 1 January 2018.

Seminars regarding the new 3:12 regulations at a number of locations

When the Committee has presented its report, PwC will hold seminars around the country to review and analyse the proposal. Here is a list of the locations and dates of our seminars regarding the new 3:12 regulations. You will find invitations to our seminars in our calendar.

• Bollnäs November 8
• Borlänge November 15
• Fagersta November 22
• Falkenberg December 6
• Falun November 15
• Gävle November 7
• Göteborg November 22-23 ("Kunskapsdagarna")
• Halmstad December 6
• Hedemora November 17
• Helsingborg November 9
• Huddinge November 16
• Hudiksvall November 9
• Jönköping November 16
• Kalmar November 23
• Karlskrona November 24
• Kista November 10
• Kristianstad November 16
• Leksand November 16
• Linköping November 15
• Ludvika November 22
• Luleå November 10
• Malmö November 10
• Malmö November 25 ("Temafrukost")
• Malung December 2
• Norrköping November 16
• Piteå November 18
• Skellefteå November 17
• Stockholm November 8
• Stockholm November 9
• Sundsvall November 10
• Sälen November 25
• Söderhamn November 10
• Täby November 17
• Umeå November 18
• Uppsala November 10
• Varberg December 6
• Vindeln November 17
• Vännäs November 16
• Västervik November 22
• Västerås November 30
• Växjö November 22
• Ystad November 17
• Älmhult November 21

The invitation form for the various seminars can be found in our calendar. If you cannot find an invitation in the calendar for the seminar (location/date in the list above) you wish to attend, just keep an eye open! The calendar is updated on an ongoing basis with new invitations.