The Swedish Tax Agency's general advice regarding share split and redemption
Share split and redemption 2008
Information for shareholders tax resident in Sweden
The Swedish Tax Agency has issued general advice, SKV A 2008:12, on how large portion of the acquisition cost of the shares that shall be allocated to the shares and the redemption shares respectively. The Swedish Tax Agency believes that 95,7 percent of the acquisition cost of a share of series A and B should be allocated to the remaining share of the same series and that 4,3 percent should be allocated to the redemption share.
Example: If the acquisition cost for one share was SEK 100, SEK 4,30 will be allocated to the redemption share. The remaining share will have an acquisition cost of SEK 95,70. If the redemption share was sold or redeemed for SEK 5, a capital gain of (5 - 4,30 =) SEK 0,70 will arise.
Please, find more specific information in the Swedish Tax Agency's general advice, SKV A 2008:12, at the Agency's web site, Link to Swedish Tax Agency
For shareholders tax resident outside Sweden
For shareholders resident outside Sweden the tax situation may vary depending on local tax regulations. SKF urges shareholders resident outside Sweden to contact local tax counsel if anything is unclear as to the tax situation.
However, for shareholders that are not tax resident in Sweden, the redemption of shares is deemed to be a dividend for Swedish tax purposes. This means that the consideration received will be subject to Swedish withholding tax. The withholding tax rate is 30 percent but it is often reduced by tax treaties with other countries. No withholding tax is imposed if the redemption share has been disposed of in the market. It should be noted that a refund from the withholding tax that is attributable to the acquisition cost of the shares may be claimed.
For further information see the Information brochure that was drafted before the split and sent to the shareholders.
In order to get the refund, shareholders resident outside Sweden need to file a form, Claim for repayment of Swedish tax on dividends - SKV 3740, with the Swedish Tax Agency, the Ludvika Office. The application form is available in English at the Tax Agency's web site, at this link.