Transferring the right to a dividend to another person is an event fraught with potential tax pitfalls. NVR strongly recommends that any shareholder considering this consult legal and tax experts before taking any decisive steps. Below is a summary of some of the key consequences:
Constructive Dividend Risk: Case law holds that a transfer of wealth—such as a dividend—from a company to another legal entity without a bona fide business reason is deemed a distribution to the shareholders of the transferring company and is therefore taxable as if paid to them. However, if a shareholder waives a dividend in order for the company to make a gift to a foundation, the shareholder is not taxed on the waived dividend.
Skatteverket’s Position on Waived or Repaid Dividends: The Swedish Tax Agency considers that if a shareholder waives an approved dividend or repays a distributed dividend for any reason other than having successfully annulled the dividend resolution on civil-law grounds, the dividend remains taxable because it was available for the shareholder’s disposal.
Cash Principle for Taxation: Dividend income is taxed according to the “cash principle,” meaning a dividend is taxable in the year when the shareholder can actually dispose of it. That moment is determined at the general meeting. If no specific date is set, the dividend is considered available immediately and taxed in that year.
Timing for Coupon Companies: In a bearer-share (coupon) company, the dividend becomes payable as soon as the general meeting resolves it. From that date, shareholders acquire a claim against the company for the dividend amount—this claim is the shareholder’s property. The company can no longer revoke the dividend or demand repayment. Therefore, Skatteverket treats the dividend as available—and thus taxable—on the day of the general meeting.
Deferred Payment Resolutions: The general meeting can decide that the dividend is paid at a later, specified date. In such cases, the dividend is generally treated as available and taxable on the actual payment date. However, Skatteverket holds that the dividend must be treated as available—and taxable—no later than the day before the next annual general meeting, even if all shareholders agree to an even later payment date.