Favourable decision on taxation of Fortum’s financing companies

PRESS RELEASE 19 December 2014

Fortum has received from the Finnish Tax Administration a non-taxation decision
regarding activities in the Belgian and Dutch financing companies. The decision
is in line with the Finnish Supreme Administrative Court’s 2014 precedent
decision regarding the treatment of hybrid loans (recharacterisation).

The authorities audited Fortum’s financing companies in Belgium and Holland for
2008 – 2011. For these years, Fortum has paid approximately EUR 38 million in
taxes to Belgium and EUR 16 million to Holland on interest income in accordance
with the local tax regulations.

The audit started in February 2013 as part of the Tax Administration’s transfer
pricing project. Fortum has cooperated with the authority especially to clarify
the business grounds for the Belgian financing company.

Fortum's Head of Tax, Reijo Salo comments: "For our opinion, it is positive
that the Tax Administration's decision aligns with the established legal praxis
that was confirmed by the Finnish Supreme Administrative Court’s precedent
decision. Taxes are a consequence of business, and therefore we pay tax there,
where business is located."

The competitiveness of an international, capital intensive company requires
that it can efficiently finance the operations and investments it has in
different countries, like new power plant construction projects, while also
managing financing risks. The Benelux countries (Belgium, the Netherlands,
Luxembourg) have international financing systems that are effective from a
corporate finance perspective as well as a predictable and stable operating
environment that is compliant with EU regulations.

Fortum is one of the biggest tax payers in Finland. In 2013 Fortum’s total tax
rate – taxes in all countries of operation – was 33.8% on pre-tax earnings (EUR
644 million). In Finland, Fortum paid a total of EUR 174 million in taxes and
employer contributions.
The Tax Recipients’ Legal Services unit within the tax authorities has the
right to appeal the decision.

Fortum Corporation
Corporate Communications

Further information: Reijo Salo, Head of Tax, tel. +358 50 45 24443

Fortum’s tax footprint

Fortum’s purpose is to create energy that improves life for present and future
generations. Catering to the versatile needs of our customers, we generate,
distribute and sell electricity and heat, and offer related expert services.
Our operations focus on the Nordic and Baltic countries, Russia and Poland. In
2013, Fortum’s sales totalled EUR 6.1 billion and comparable operating profit
was EUR 1.6 billion. We employ approximately 8,800 people. Fortum’s shares are
traded on the NASDAQ OMX Helsinki. www.fortum.com