Guide: calculate and pay tax on share dividends

Dividend tax is something that is paid when dividends from funds or shares take place. For many, it is more advantageous for tax purposes, for example, to take out a dividend from their own company, than perhaps to take out a personal salary. There are, of course, different forms of dividends, and hence also different laws. This depends entirely on the form of dividend in question.

Should I choose dividend or salary?

If you are a self-employed person who runs a limited company , you can choose to either withdraw your salary directly from the company, or receive money in the form of dividends.

The tax rate varies between 20 and 60% when it comes to dividends. For listed shares, ie shares listed on the stock exchange, the tax rate is generally approximately 30%. For unlisted shares that are also unqualified, ie if the shareholder does not work actively in the company, it is 25%. In the case of qualifying shares, the tax rate depends entirely on the limit amount.

In the case of a wage deduction, you must first of all pay the employer’s contribution, which is 31.42%, and then the regular income contribution. This may sound worse, but then you must also keep in mind all the benefits that are included in, for example, the employer’s contribution, including health insurance and pension. Dividends do not in any way affect pension benefits. A good way to maximize your salary while maximizing your pension benefits can be to take out just enough salary so that you just stay below the limit, while maximizing the pension points you receive, while you fall below the limit of the state tax.

If you choose the form of dividend, you will still have to pay a corporation tax of 21.4% . However, there is no employer’s contribution here. As I said, this tax can vary.

Taxation on dividends in your limited company

As previously stated, the tax rate for shares that are listed with little variation is 30%, and that for shares that are not listed, as well as unqualified 25%. The dividend in a limited liability company is in no way deductible and the company must therefore tax both the dividend and the private profit. Thus, there will be a double declaration that must be made, ie both for private individuals and for the company itself. The tax that must be paid on capital is 20%, and the dividend itself is 30%.

Capital taxation

As was also mentioned a little earlier, there is another alternative. Instead of taking a dividend from the shares, you can instead choose a capital gain . This can be set off against losses in the shares. Capital tax is also a convenient way to get away with the so-called coupon tax if, for example, you have shares abroad.

If you live abroad

If you do not live in Sweden, but are still looking for some kind of dividend that comes from a Swedish company, first of all a so-called coupon tax must be deducted. The coupon tax is 30% but can sometimes be reduced slightly by including various tax deductions in the calculation. Keep in mind, however, that this only applies if the recipient is a private person.

It’s easy to start wondering why we actually have this tax. The reason for this is simple. Anyone who does not live in Sweden is not liable to tax here either and you do not want anyone to pay double tax. Sweden, for example, has agreements with several countries precisely to avoid this double taxation. In the USA, Germany and France, for example, Swedes have a coupon tax of 15%, in the UK 5%, and so on.

Dividend tax in small companies

Dividend tax in small companies exists to prevent someone who has their own company from doing exactly the same work as an employee but instead invoices the employer via the company. This means that they can then receive compensation for the work as a dividend instead of salary, which is more advantageous. This is aimed primarily at freelancers, who could otherwise make large tax deductions by doing so. The tax rate here depends on the type of service in question.

How to declare tax on share dividends

To declare, fill in a simple K4 paper, where all your gains and losses are reported. On this form, everything must be included, every little penny that has left and entered the company.

Calculation example: tax on share dividends

How can you then calculate the tax on, for example, the distribution of shares?

  • Let’s say that a private individual bought 30 shares for SEK 50 each.
  • These shares are then sold for SEK 100 each.
  • Which gives us a profit of 1500 kroner
  • 30% of 1500 is what must be paid, ie SEK 450.
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