Press release

Fortum to appeal income tax decisions made by the Swedish Administrative Court regarding years 2009–2012

29 April 2016, 19:50 EEST


The administrative court in Stockholm, Sweden, has on 29 April given its
decisions related to Fortum's income tax assessments in Sweden for the years
2009–2012. Part of the court decisions were in Fortum's favour. Fortum will
appeal those not in favour, as Fortum disagrees with the interpretation of the

If the decisions remain despite the appeal, the impact on net profit would be
approximately SEK 1,106 million (EUR 121 million). Fortum has not made a
provision, as based on existing legal analysis, EU Commission's view and
supporting legal opinions the decisions should be ruled in Fortum's favour.

"Fortum restructured its operations and reallocated loans in 2004–2005 to
ensure future operations. These reallocations did not impact Fortum's tax base
in Sweden. We find the assessments problematic, as even the rules as such allow
interest deduction, the tax authorities interpretation makes the rules
unpredictable. The matter concerns Fortum's right to deduct interest expenses
which relate to the reallocation of loans between Fortum's Swedish
subsidiaries, which according to the Swedish tax authority (STA) Fortum would
not be entitled to deduct. According to the court there were good business
reasons behind the restructuring, but court found them not to be such business
reasons that would allow interests to be deductible", says Reijo Salo, Fortum's
Vice President, Corporate Tax.

Fortum Corporation
Corporate Communications

Further information:
Reijo Salo, VP, Corporate Tax, tel. +358 50 45 24443

Background information:

Fortum received income tax assessments in Sweden for the years 2009–2012.
According to the tax authorities, Fortum would have to pay additional income
taxes for the years in question for the reallocation of loans between the
Swedish subsidiaries in 2004–2005, as well as additional income taxes for the
years 2010–2012 for financing of the acquisition of TGC-10 (current OAO Fortum)
in 2008. The claims are based on the Swedish interest deduction limitation
rules which entered into force in 2009.

In January 2015 the Swedish tax authority informed the Administrative Court
that it has abandoned its claim for the year 2010 and in February 2016 it has
abandoned its claims for the years 2011 and 2012 regarding the financing of the
acquisition of TGC-10. Moreover, in December 2015 and in February 2016 the
Swedish tax authority abandoned a part of the claims relating to the
reallocation of loans in 2004–2005.

Read more:

Fortum's Interim Report January-March 2016, Note 22: Legal actions and official

Fortum's tax footprint is available online:

Related press releases:

Press release 10 November 2014: Fortum will appeal Swedish tax authority
decision on additional tax for 2012:

Press release 18 October 2013: Administrative court approved Fortum's appeal on
the Swedish tax authority's decision on additional tax for 2009:

Press release 14 January 2013: Fortum will appeal Swedish STA decision on
additional tax for 2010:

Press release 4 January 2012: Fortum will appeal the Swedish tax authority
decision on additional tax for 2009:

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