What is a dividend?
A dividend (utdelning) is when a limited company pays out part of its profit to its shareholders, usually as an amount per share. The decision is taken by the general meeting and may only be made out of distributable equity, subject to the "prudence rule" in the Swedish Companies Act. Many unlisted growth companies, however, pay no dividend and reinvest their profit instead.
How a dividend works
The board proposes a dividend and the meeting decides. On the record date it is determined who the shareholders are and therefore entitled to the dividend, which is then paid out. In unlisted companies that are not connected to Euroclear, this is handled instead via the company's share register.
How are dividends taxed?
For individuals, taxation depends on whether the shares are "qualified" or "unqualified". Holdings in close companies (fåmansföretag) are often covered by the special 3:12 rules. Dividends on unqualified unlisted shares are taxed as capital income, where only five-sixths is taken up — an effective rate of 25 percent. The rules are complex and can change; always check the current rules with the Swedish Tax Agency (Skatteverket) or an adviser.