Fortum To Appeal Swedish Tax Authority Decision

Fortum has received an income tax assessment of over SEK 400 million (EUR 40 million) from the Swedish tax authority STA in addition to the amount of SEK 1.9 billion (EUR 180 million) already paid for 2009. The claim is mainly related to Fortum’s restructuring in 2004 – 2005. Fortum considers the claim unjustifiable and will appeal the STA decision, the company said.

According to STA, Fortum would have to pay additional income taxes for the year 2009 for the reallocation of the loans in Swedish subsidiaries in 2005. The claim is based on the change in tax regulation as of 2009. Based on the new rules and requirements, STA reassessed Fortum’s business reasons in 2005 for the reallocation of old loans. STA has not questioned the interest rates of the loans charged to the Swedish entities.

Fortum carried out a considerable restructuring in Sweden and in Finland in 2004 – 2005 in connection with the listing and sales of Neste Oil shares in 2005. The result of the transactions had no impact on the income generated by Fortum’s Swedish subsidiaries. In 2009, the total amount of Fortum’s income and other taxes amounted to SEK 3.2 billion (EUR 299 million) in Sweden.

“We want to serve our customers and create a sustainable long-term commitment and business also in Sweden, where Fortum is one of the biggest corporate tax payers. In our industrial investments and financing, we act on the long term basis and respecting laws and regulations” says Juha Laaksonen, CFO, Fortum Corporation.

As an international company with capital intensive business Fortum needs to manage its funding for the total business and for the whole Group. Therefore, it is essential for Fortum to have a well-balanced capital structure to support the businesses and to meet the laws and rules in all of the countries in which it operates.

In 2006 – 2009, Fortum paid income taxes totalling SEK 6.3 billion (EUR 649 million) in Sweden. In 2010, Fortum was one of the largest corporate tax payers in Sweden and the largest in Finland. In 2010, Fortum paid corporate taxes of EUR 183 million in Finland.