Proposed changes to partnership tax rules
The Swedish Government has decided to take action against what is seen as an over-utilisation of certain tax rules for private companies. The aim is to prevent excessive conversion of earnings into income from capital. Employees who have been given or offered to buy minimal shares in companies have been able to use the conversion rules in order to lessen their tax burden. The Swedish Government therefore proposes that those employees who own 4% or more in a business will be entitled to benefit from these rules. This is the second attempt by the Swedish Government to implement changes after an earlier proposal had to be withdrawn after fierce criticism. The revised proposal has also been criticised but this time the Swedish Government is expected to stand firm. The new rules are expected to come into force on 1 January 2014.