Tax dispute between Finland and Austria resolved

Tax dispute with regard to two Finnish subsidiaries of Borealis AG resolved through Mutual Agreement Procedure

On 7 June 2019, the Finnish and Austrian Tax Authorities reached an agreement on two cases regarding the taxation of Borealis Technology Oy and Borealis Polymers Oy. The dispute was resolved through a Mutual Agreement Procedure (MAP) between Finland and Austria. Borealis welcomes the agreement, which finally eliminates double taxation.

The disputes emerged during the years 2014-2015, after Borealis Technology Oy and Borealis Polymers Oy had received re-assessment decisions from the Finnish Tax Authority regarding the intercompany licence agreements in place. The Finnish Tax Authority held the view that the Finnish companies had not actually licenced their intangible assets, but had instead sold them to their Austrian parent company Borealis AG.

In both cases, the MAP agreement has confirmed the nature of the intercompany licence agreements, albeit with an increase of the applicable licence fees.

The purpose of the MAP is to avoid double taxation of the same income in Finland and Austria. The MAP is based on the Double Taxation Convention between Austria and Finland as well as on the EU Arbitration Convention Procedure.

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 multiple times on the same income. Borealis believes that clear and consistent taxation practices within the European Union are needed for companies to ensure their competitiveness and future growth.

As the second largest polyolefins producer in Europe, Borealis has a strong asset base and a workforce of approximately 6,400 in the region and is strongly committed to its European operations. Borealis employs approximately 1,900 employees in Austria and 900 in Finland.

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For further information, please contact:
Virginia Mesicek
Sr. Manager a.i., External Communications
tel.: +43 1 22 400 772 (Vienna, Austria)
e-mail: virginia.mesicek@borealisgroup.com