3:12 rules

3:12 Rules – Maximising Value for Owner-Managers

If you are a shareholder in a closely held company in Sweden, you are subject to the so-called 3:12 rules—a tax framework that governs how dividends and capital gains from the sale of shares are taxed. While the rules are complex, they play a crucial role in determining how much of your profits you ultimately retain.

The purpose of the 3:12 rules is to distinguish between employment income and capital income, as employment income is generally taxed at a significantly higher rate than capital income. The challenge lies in finding the most advantageous structure for your specific circumstances while remaining fully compliant with Swedish tax legislation.

Why the 3:12 Rules Matter

Dividends that fall within your annual allowance amount (gränsbelopp) are generally taxed at a favourable rate of 20%, often making them more tax-efficient than salary.

Amounts exceeding the allowance may be taxed as employment income, potentially resulting in significantly higher tax rates.

The allowance amount can be calculated using either the simplification rule or the salary-based rule, two methods with different requirements and outcomes.

Understanding and applying the 3:12 rules correctly can have a substantial impact on your personal tax position—not only in relation to annual dividend distributions, but also when planning for a future sale of your business.

How Forvis Mazars Can Help

Our tax specialists have extensive experience advising owner-managed businesses and private individuals. We can help you:

Optimise your dividend strategy within the framework of the 3:12 rules

Evaluate which calculation method is most beneficial for your circumstances

Prepare supporting documentation and ensure compliance in the event of a tax review

Develop long-term plans for ownership structures, succession planning, and generational transitions

Would you like to understand how to make the most of the 3:12 rules? Contact our specialists today for tailored advice.

Welcome to a partner that supports you every step of the way.

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Forvis Mazars Achieves Top Ranking in Client Satisfaction Survey – Forvis Mazars.