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
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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