Loans to personal shareholders

From 7 October 2015, loans (credit and/or the provision of security) from private limited companies, etc. to personal shareholders and their close relatives will be taxed as dividend for the recipient according to the shareholder model.

In general, these rules apply to all types of credit (loan) and provision of security made directly or indirectly from a company to a personal shareholder/partner who directly or indirectly owns shares or securities in the company, and to their close relatives.

The part of the loan that, combined with any ordinary dividends, exceeds the deduction for risk-free return, must be adjusted upwards by a factor that changes each year. For 2021, the factor is 1.44, and the effective tax rate on taxable loans is 31.68%. For 2022, the factor has increased to 1.6, and the effective tax rate is 35.2%. The upward adjustment is automatically completed in connection with the tax calculation.

Read more about upward adjustment of dividends and other owner income with factors.

The repayment of loans that have previously been subject to dividend taxation is treated as investment of new capital by the shareholder.

Read more about taxation of shareholder loans

New rules regarding loans taken out before 7 October 2015

Generally, the new rules specifying that loans from your own company are taxed as dividend apply to loans taken out after 7 October 2015.

This means that a loan taken out before that date is not covered by the regulatory changes if it's deemed to meet the criteria for being considered a real loan for tax purposes. 

An increased balance on an existing loan will nevertheless be taxed as dividend, as such an increase is considered equal to a new loan. This may also apply to the continuation or extension of a loan that has fallen due to payment.

You can read more about loans from private limited liability companies and to shareholders in general: