FORTUM CORPORATION ONLINE NEWS 25 October 2017
Fortum has received an income tax assessment from the Swedish tax authority related to the interests on intra-group loans for the year 2015. Fortum will appeal the decision to the Swedish Administrative Court. If the decision of the tax authority remains in force despite the appeal process, the impact on the net profit would be SEK 200 million (approximately EUR 21 million). 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 2015, 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 2015, Fortum’s taxes borne totaled EUR 413 million, of which EUR 210 million in Sweden.
Reijo Salo, Vice President, Corporate Tax, tel. +358 50 452 4443
Fortum's tax footprint 2016
Fortum is a leading clean-energy company that 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 9,000 professionals in the Nordic and Baltic countries, Russia, Poland and India, and 62% of our electricity generation is CO2 free. In 2016, our sales were EUR 3.6 billion. Fortum's share is listed on Nasdaq Helsinki. www.fortum.com