On 26 November 2025, the Swedish Parliament adopted a reform intended to simplify and improve the taxation of owners of closely held companies. The new rules take effect on 1 January 2026. With implementation approaching, shareholders should review company and ownership structures to ensure continued strategic alignment with the revised framework.
For an overview of the current rules on closely held companies before exploring the new rules, see our article covering the existing legislation here.
What's changing from 1 January 2026
- The current framework of two alternative calculation methods, the so-called simplified rule and main rule, will be replaced by a single, unified calculation method. Under the new system, the calculation of the initial threshold amount (dividends and capital gains taxed at 20%) will consist of two components:
- Basic allowance: Four income base amounts (SEK 322,400 in 2026), to be allocated proportionately across a shareholder’s total holdings in all closely held companies; and
- Salary-based allowance: 50% of the salary-base in the closely held companies and its subsidiaries, exceeding eight income base amounts (SEK 644,800 in 2026).
- Both abovementioned allowances are calculated in proportion to the shareholders ownership share. Because of the new calculation method, the existing capital share requirement of 4% and the salary withdrawal requirement of 9.6 income base amounts are no longer considered required and therefore abolished. The current salary-based allowance cap has however remained, whereby it is limited to a maximum of 50 times the salary paid to the shareholder (or a related party). In practice, some level of salary withdrawal is still required to generate a salary-based allowance.
- The special tax definition of subsidiaries is removed. Instead, the civil-law definition under the Swedish Companies Act applies. This change may, for example, allow certain salaries paid in indirectly owned subsidiaries to be included in the salary base where such salaries are excluded under the current rules.
- Salaries paid to employees in companies owned through an alternative investment fund shall be excluded from the salary-base calculation.
- Shareholders remain entitled to calculate a return on their acquisition cost at the government borrowing rate plus 9%, but only on the portion of the acquisition cost exceeding SEK 100,000. Unused dividend allowance (sw. sparat utdelningsutrymme) can still be carried forward, however, the annual interest capitalization on carried-forward amounts is removed.
- The current qualifying period is reduced from five to four years. This is particularly relevant when assessing whether a share is deemed qualified after a shareholder ceases to be actively involved in the company, whether the external investor rule and/or whether the same or similar business rule is applicable.
Strategic considerations and planning opportunities
The reform is significant and may alter optimal ownership and remuneration strategies. Owners should evaluate how the new regime affects their situation and how to position for a tax-efficient outcome from 2026 onward. As a starting point, we recommend considering the following.
Review your ownership structure – which parties can use the salary-based allowance?
- The expansion of the group of shareholders eligible to include salaries in the dividend calculation is generally positive. For companies with multiple shareholders and a substantial salary base, the abolition of the capital share requirement may improve the tax position for certain owners and remove existing ownership constraints.
- At the same time, the requirement that salaries exceed eight income base amounts may significantly affect individuals with lower salary withdrawals, despite the higher overall threshold amount.
- In addition, the revised subsidiary definition opens new planning opportunities as new companies in the group may be included in the salary-based allowance. In group structures with multiple ultimate owners and/or several subsidiaries, a review of current ownership and organisational arrangements is therefore recommended.
Do you have or need a holding company?
- In some cases when there are several owners in a closely held company, establishing a holding company for each owner may be advantageous to secure a full basic allowance, rather than a proportionate share of a single allowance.
- Conversely, if there is a large salary-base, direct ownership may become more attractive following the abolition of the 4% ownership threshold, which may justify reconsidering or dissolving existing holding structures.
- The suitability of any structure depends on the individual circumstances of the shareholder and the group. Consequently, these assessments should be made on a case-by-case basis.
* Under the civil law definition of a subsidiary, two types of subsidiaries are distinguished. In one case, the parent company holds a majority of the voting rights, i.e. more than half of the votes attached to the shares. In the other case, the parent company exercises controlling influence on another basis, for example, through the right to appoint or remove more than half of the members of the board of directors.
An indirect subsidiary relationship exists where one or more subsidiaries, alone or together with the parent company, hold such a number of shares in another company that it would constitute a subsidiary if the shares were held directly by the parent company.
