On 19 March 2019, the Helsinki Administrative Court issued two decisions regarding tax disputes between Borealis Polymers Oy and Borealis Technology Oy on the one side, and the Finnish tax authority on the other. Borealis is currently reviewing the Helsinki Administrative Court’s decisions and will assess whether it will file an appeal to the Finnish Supreme Administrative Court.
Borealis Polymers Oy and Borealis Technology Oy are Finnish subsidiaries of the Vienna, Austria- based Borealis AG. The cases at hand cover disputes related to the years 2008, 2009 and 2010. The main subject of disagreement concerns the characterisation of the nature of the transactions to be taxed. In the cases under dispute, Borealis set up and executed licence agreements in the same way it has done with its other subsidiaries in other European jurisdictions. Despite this fact, the Finnish tax authority has re-characterised these actions as sale transactions1.
Both cases are subject to Mutual Agreement Procedures between Finland and Austria to avoid double taxation. The cases at hand are transfer pricing matters, meaning they are related to the question of whether income should be taxed in Austria, or in Finland.
As a responsible company, Borealis always complies with the laws and regulations in every country in which it operates. While Borealis is prepared to pay its fair share of corporate income tax, it seeks to avoid being taxed twice, or even multiple times, on the same income. Borealis believes that clear and consistent taxation practices within the European Union are needed for international companies to ensure competitiveness and future growth. At present, advance ruling possibilities and dispute settlement mechanisms are not yet effective enough to mitigate this uncertainty.
Borealis is committed to its operations in Finland, where it contributes significantly to Finnish society. Borealis employs 900 people at its facilities in Porvoo, and is an important payer of tax in Finland.
1) For more details on the background of these tax cases, kindly refer to the Borealis Combined Annual Report 2018, English edition, page 157.
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For further information, please contact:
Virginia Mesicek
External Communications Manager
tel.: +43 1 22 400 772 (Vienna, Austria)
e-mail: virginia.mesicek@borealisgroup.com
Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With its head office in Vienna, Austria, the company currently has more than 6,800 employees and operates in over 120 countries. Borealis generated EUR 8.3 billion in sales revenue and a net profit of EUR 906 million in 2018. Mubadala, through its holding company, owns 64% of the company, with the remaining 36% belonging to Austria-based OMV, an integrated, international oil and gas company. Borealis provides services and products to customers globally, in collaboration with Borouge, a joint venture with the Abu Dhabi National Oil Company (ADNOC) and with Baystar™, a joint venture with Total and NOVA Chemicals in Texas, USA. www.borealisgroup.com
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