Dynasty Tax Drives Every Structural Decision

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“Their conversation became crucial for a very important decision, to move Tetra Pak abroad. The family had long been worried about Sweden’s heavy taxation on profits, capital, and inheritance. Hans had calculated that if he died, the children would be forced to pay an inheritance tax of a total of 350 percent, as the tax would be paid with already taxed funds. If they wanted to keep the company within the family dynasty, staying in Sweden was not an option, he assessed.”

“It took Hans fifteen years of pondering and preparations, equating to three years in terms of full-time work, before everything was ready for the move. In 1982, they increased the dividends in the Swedish parent company from five million to 79 million kronor, a sum that “coincidentally” matched the very low recorded value of the foreign subsidiaries – the market value amounted to about five billion. But the ingenious part was that the dividend was not paid out in money but in shares of the subsidiaries. Through another Tetra company, the shares were then transferred to Dutch Tetra Pak. In this manner, they very elegantly avoided being stopped by the currency regulations.”