Nokian Tyres charged 59 million euros extra tax in Finland

Nokian Tyres plc has received a tax reassessment decision from Finland’s Tax Administration, according to which the Company is obliged to pay 59 million euros additional taxes with punitive tax increases relating to the 2011 tax year. Payment must be made in November 2017. 39 million euros of the figure relates to additional taxes and 20 million euros relates to punitive tax increases and interests.

The company has already paid 89.2 million euros additional taxes and punitive tax increases concerning tax years 2007-2010 and has appealed them by filing an appeal to the administrative court in January 2017.

The Tax Administration states in the reasoning of its decision concerning 2011, that the transfer pricing was market-based with all other but the Russian subsidiaries. Nokian disputes the Tax Administration’s view that its Russian plant should be considered as a low risk contract manufacturer. The Tax Administration has ruled that a significant part of the Russian subsidiaries’ profits should be added to Nokian Tyres’ taxable income in Finland. However, Nokian says that in practice this leads to double taxation of income.

Therefore, Nokian is appealing the 2011 tax year ruling.