Fortum has received an income tax assessment of approximately EUR 29 million (approximately SEK 282) from the Swedish tax authority related to the interests on intra-group loans for the year 2014. 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%. This decision by the Swedish tax authority practically means double-taxation and illustrates low predictability of Swedish tax regulation. Energy production is a long-term capital intensive business where international financing plays an important role. It is important that we can effectively operate and finance our operations and make investments in different countries," says Reijo Salo, Fortum’s Vice President, Corporate Tax.
The assessment concerns the loans given 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 in 2014, i.e. deriving from business needs. The rest of the interests are seen as non-deductible. The decision is based on the changes in the Swedish tax regulation in 2013.
In 2014, Fortum’s taxes borne totaled EUR 464 million, of which EUR 226 million in Sweden. Fortum’s total tax rate in 2014 was 30.0% and in Sweden 82.4%.
Reijo Salo, Vice President, Corporate Tax, tel. +358 50 452 4443
Fortum’s Interim Report January-September 2016, Note 22: Legal actions and official proceedings: http://apps.fortum.fi/investors/Fortum_Q3_2016_Interim_Report.pdf
Fortum's tax footprint is available online: http://apps.fortum.fi/gallery2/Fortum_as_a_Taxpayer.pdf
Fortum is a leading clean energy company which provides its customers with electricity, heating and cooling as well as smart solutions to improve resource efficiency. We want to engage our customers and society to join the change for a cleaner world. We employ some 8,000 professionals in the Nordic and the Baltic countries, Russia, Poland and India, and already 64% of our electricity generation is CO2 free. In 2015, our sales were EUR 3.5 billion. (NASDAQ HELSINKI: FUM1V). www.fortum.com