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Mathematical and comparison values of your company’s share

The result of your company’s “net worth” calculation determines these two values of your company’s share. For the “comparison value”, the calculation rule is to first subtract the year’s total dividends from the company’s net worth. The comparison value cannot be more than 50% higher than the previous year’s comparison value. If your company is not listed on a stock exchange, the comparison value of one share is part of the publicly disclosable tax data. Look up comparison values here.

Net worth is the remaining difference, left over when all of your company’s debts and liabilities are subtracted from the company’s assets. The net worth calculation takes account of the company’s business and agricultural sources of income, so that all the assets and liabilities related to both these sources of income must be included in the calculation.

Assets and property are divided into fixed, current, investment, financial and “other” assets. Calculated tax receivables, expenses of a long-term nature but lacking a net value as an “asset” are not part of the above.

Debts and liabilities are the amounts booked under the “borrowed capital” heading of your company’s balance sheet. For tax purposes, a loan designated as a subordinated loan is normally treated as external-source capital, i.e. as borrowed. However, any deferred tax liabilities are not treated as part of the company’s debts.

Divide net worth (assets minus debts) by the quantity of issued shares held by shareholders. The result is the mathematical tax value of one corporate share. The above calculation must be based on a net worth value that has been verified and that reflects the previous year’s closing of accounts, i.e. the balance sheet for the year before the tax year. In the case of an individual who receives dividends, and in the case of an estate of a deceased individual, the above mathematical value, valid for the current tax year, will serve as the base for the division between capital income and earned income – if the individual or the estate receive dividends from the company during the same tax year.

For example, if your company’s accounting period ended on 31 May 2023, the net worth for that period’s end would be the base for the 2024 mathematical value. If your company’s shareholders receive dividends in 2024, the mathematical value will determine the proportions of capital income and earned income subject to tax when the Tax Administration assesses the shareholders’ taxes.

The comparison value is based on the company's net worth. However, the dividends and advance dividends (but not the dividends, if any, that are paid out by a substituting entity) that your company had agreed to distribute for the previous year are subtracted from net worth before the calculation. In addition, the calculation takes account of any changes in circumstances that may have occurred during the next accounting period (= the current year), such as changes in the quantity and the nominal value of the shares, or any mergers and de-mergers that have taken place.

The shareholder’s income taxes

People who own shares in a limited liability company are not allowed to withdraw money from the company’s bank account for private purposes. The shareholders’ personal taxation is not affected by the fact that they own the shares until they start withdrawing income from the limited liability company in the form of wages or dividends, for example. Read more about the tax treatment of dividends received by an individual shareholder. Distribution of dividends has no tax consequences for the distributing company.

The Tax Administration adjusts the value of an individual shareholder’s total holding, expressed in accordance with the mathematical value of company shares, before the received dividend amount is split into a capital-income part and an earned-income part. If the individual shareholder has borrowed money from the company, the Tax Administration will subtract the loan balance from the value of that shareholder’s total holding. Shareholder loans are only subtracted this way if the individual shareholder or their family member(s) own at least 10% of the company’s shares or votes – assuming that the company is one that conducts a trade or business. In addition, if a majority shareholder or family has lived in a house or apartment owned by the company, the value of that residential property is also subtracted from the value of the shareholder’s total holding. For purposes of the above rule, “majority shareholder” means an individual not deemed as an employee within the meaning of the Employees Pensions Act.

Page last updated 1/1/2023