NOKIA, Finland (Dec. 16, 2015) — Nokian Tyres P.L.C. intends to appeal a Finnish Administrative Court's decision to assess its nearly $95 million in additional taxes, along with punitive tax increases and interest, calling the court's action “unfounded.”
The court's ruling is based on a “transfer pricing tax audit” into intercompany transactions between Nokian Tyres and its subsidiaries covering the years 2007-11, Nokian said.
The assessment consists of $60 million for additional taxes $35 million for punitive tax increases and interest, Nokian said. The payment is due in January.
“If necessary, [the company] will continue the appellate process to the Administrative Court,” said Nokian, adding that it will also require the competent authorities to negotiate on the elimination of the double taxation if need be.
The company will, however, record the 2007-2010 total additional taxes in full in its the financial results for 2015. The ruling will not affect the company's dividend distribution.
Nokian said that if its appeal fails, the group's corporate tax rate will likely rise in the next four years, from the previously announced 17 percent to up to 22 percent.