Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316184 
Year of Publication: 
2025
Series/Report no.: 
Working Paper No. 2025:3
Publisher: 
Institute for Evaluation of Labour Market and Education Policy (IFAU), Uppsala
Abstract: 
An increase in the dividend tax on shares of Swedish closely-held corporations, scheduled for January 1, 2018, was canceled at short notice. In a difference-in-difference setting, we examine how firms reacted to the canceled reform. We find that dividends payments increased in 2016 and 2017 and declined sharply in 2018, especially for cash-rich firms. However, cash holdings recovered quickly in 2018 and 2019, and the excessive dividend payouts did not affect investments. Paradoxically, the discontinued reform implied an additional tax burden for those engaged in intertemporal tax arbitrage.
Subjects: 
Owner level taxes
tax planning
investments
employment
JEL: 
H32
G35
Document Type: 
Working Paper

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