andrabeskattning

Andrabeskattning, a Swedish term, translates to "secondary taxation" or "taxation of the second taxpayer." It refers to a specific tax regulation within the Swedish system designed to prevent individuals from artificially shifting income to a lower-taxed entity to reduce their overall tax burden. The core principle behind andrabeskattning is that if an individual has a significant influence or control over a legal entity and derives personal benefit from its income, that income may be taxed as if it were received directly by the individual, regardless of how it is formally distributed.

This concept is particularly relevant in situations involving closely held companies or other legal structures where the lines between personal and corporate finances can become blurred. The Swedish tax authorities scrutinize arrangements where an individual might, for example, be an owner and employee of a company, and the company's profits are retained or distributed in a manner that appears designed to minimize personal income tax. Andrabeskattning aims to ensure that the economic substance of a transaction, rather than its legal form, determines the tax liability.

The application of andrabeskattning can be complex and depends on various factors, including the degree of control the individual exercises, the nature of the income, and the purpose of the income shifting. It is a tool used to maintain fairness and integrity in the tax system by preventing tax avoidance through the manipulation of legal entities.