A shareholder loan occurs when a company provides a loan, posts security, or otherwise makes funds available to a shareholder, according to Section 16 E of the Tax Assessment Act. It is often used as an alternative to paying dividends or salary – and therefore it is taxed as if it were dividends or salary. Section 16 E functions as a safeguard against tax avoidance by taking out loans instead of receiving dividends or salary. From January 1, 2026, the rules will change so that taxation occurs according to the so-called net principle, where only the highest outstanding amount is taxed.

The rules apply to taxable individuals who have controlling influence in the company according to Section 2 of the Tax Assessment Act. Controlling influence exists if one directly or indirectly controls more than 50% of the voting rights or share capital. This means the rules primarily affect major shareholders and their close relatives, such as spouses, children, or parents. However, the rules do not automatically apply to management members such as directors and board members, unless they simultaneously have controlling influence according to the same criteria.

From January 1, 2026, amended rules will take effect. Taxation applies to the highest outstanding amount in the company. One can repay the loan and later withdraw the same amount again without triggering new taxation, as long as the highest outstanding amount over time is not exceeded. The new rules only apply to loans provided from January 1, 2026, onwards. Loans provided before this date will continue to be covered by the old rules until they cease.

The legislative change was introduced to avoid repeated taxation of the same loan amount. Under the current rules, practice has shown that repayment and subsequent re-lending of the same amount during a year could result in multiple taxations, even though it was essentially the same economic transaction. With the new rules, the legislator wishes to create a more accurate and fair taxation that takes into account the actual economic relationship between shareholder and company.

Each loan is taxed as dividends/salary at the time of provision, regardless of whether it is later repaid. If one repays and then borrows again, the same amount can trigger taxation multiple times.

If loans are not repaid, or if loan withdrawals continuously occur beyond the highest outstanding amount, it will trigger taxation on the outstanding amount – as if it were dividends or other personal income.

Shareholder loans must be handled with great care from a tax perspective, as the consequences can be significant. It is crucial that the advisor determines whether controlling influence exists, as this is a prerequisite for the rules in Section 16 E of the Tax Assessment Act to apply. The advisor should conduct a thorough review of transactions between the company and the major shareholder to identify whether loans have been provided and whether they have been repaid on time.

With the new rules from 2026, it also becomes essential to keep track of the highest outstanding amount over time, which requires ongoing monitoring and updated documentation. In advisory work, it should be discussed how the company and major shareholder can structure their transactions to avoid unnecessary taxation and ensure compliance with the rules.