Fortum has received an income tax assessment of approximately EUR 29 million (approximately SEK 273 million) from the Swedish tax authority related to the interests on Group loans in the 2013 tax year. Fortum will appeal the decision to the Swedish Administrative Court and ask for deferment of payment. Fortum has not made provisions as it considers the tax unjustified.
"Fortum has already paid taxes on this interest income in the Netherlands at the normal tax rate of 25%. The ruling by the Swedish tax authorities practically means double-taxation. Energy production is a long-term capital intensive business where international financing plays an important role," says Per Langer, who heads Fortum's operations in Sweden. "Fortum strongly supports the EU-wide initiative to improve the predictability of taxation and to avoid double-taxation."
The assessment concerns the loans given in 2013 by Fortum's Dutch financing company to Fortum's subsidiaries in Sweden. The interest income for these loans was taxed in the Netherlands. The Swedish tax authority considers just over a half of the interest relating to each loan as deductible, i.e. deriving from business needs. The rest of the interests are seen as undeductible. The decision is based on the changes in the Swedish tax regulation in 2013.
In 2013, Fortum's taxes borne totaled EUR 558 million, of which EUR 297 million in Sweden. Fortum's total tax rate in 2013 was 31.8% and in Sweden 48.0%.
Fredrik Karlsson, VP, Corporate Communications, Sweden, +46 76 866 77 25
Fortum’s purpose is to create energy that improves life for present and future generations. Fortum’s expertise is in CO2-free and efficient electricity and heat production. The company also offers energy-related products and expert services to private and industrial customers and energy producers. Fortum’s main areas of operation are the Nordic and the Baltic countries, Russia and Poland. In 2014, the annual sales (excluding the divested electricity distribution business) totalled EUR 4.1 billion, and comparable operating profit was EUR 1.1 billion. The company employs approximately 8,000 people. Fortum’s share is listed on Nasdaq Helsinki. www.fortum.com.
Press release on 11 October 2014: Fortum will appeal Swedish tax authority decision on additional tax for 2012