OREANDA-NEWS. The Administrative Court in Finland on 16 May 2016 has rejected the Tax Recipients' Legal Services Unit's (VOVA) appeal regarding the tax assessment imposed on Fortum in December 2013 for the year 2007. Thus the favourable decision granted to Fortum by the Board of Adjustment of the Large Taxpayers' Office in 2014 remains in effect.

According to the tax assessment given in December 2013, the additional taxes including penalties and late payment interest would have amounted to EUR 136.4 million. Fortum has not made a provision, as based on existing legal analysis the decisions should be ruled in Fortum's favour.

Fortum's Reijo Salo, Vice President, Corporate Tax, says that the decision now received is in line with the principle adopted by the Supreme Administrative Court in June 2014. According to the Supreme Administrative Court's precedent in June 2014, under transfer pricing rules, the nature of business cannot be re-characterised for tax purposes, but can only adjust the pricing of goods or services.

"For companies it is very important that tax policies are consistent and predictable," Salo continues. "According to international taxation principles, taxes are to be paid in the country where the revenue is earned, and the same revenue cannot be taxed multiple times."

VOVA can apply for the right to appeal to the Supreme Administrative Court.