Annual Report 2014

Tax footprint 2014

Finnish Industry Investment is reporting for the first time on the impact that taxes and tax-like payments levied on the Group’s operations in 2014 have on the society surrounding the company. More transparent reporting on the taxes and tax-like payments incurred by Finnish Industry Investment’s business activities is an element of Finnish Industry Investment’s corporate responsibility and now a part of its standard reporting procedure.

Tax strategy and operating principles

Factors relating to taxation are addressed when planning business activities and in the associated decision-making. Business decisions aim to take taxation into account as one factor in achieving the business targets and in ensuring a balanced position in terms of taxation.

Finnish Industry Investment’s tax strategy aims to support business solutions and to ensure their appropriate implementation also with respect to taxation. Private equity and venture capital investment involves a careful and thorough review of tax-related aspects in the preparation stage of both investments in funds and direct investments.

Finnish Industry Investment, in addition to investing in Finnish funds, also makes investments in foreign funds. The established practice in the private equity and venture capital industry is that funds are designed to be flow-through entities as regards taxation. This means that the fund itself is not liable to tax, but instead the income the fund generates is taxed at the investor level, according to the investor’s own tax status.

Under Finnish tax legislation, Finnish Industry Investment pays income taxes to Finland on the income it receives from foreign funds. This avoids double taxation. In handling its tax affairs, Finnish Industry Investment gives high priority to the thorough completion and timely submission of its tax returns, as well as to fulfilling all other requirements and obligations set by legislation.

Finnish Industry Investment’s business activities have produced a loss in recent years. Consequently, the company has no outstanding income taxes payable and the company has confirmed losses to offset against tax on future profits.

Principles applied in tax reporting

In this report the essential taxes and tax-like payments are classified by the type of tax. In line with the principle of essentiality (materiality), the following taxes have not been reported owing to their insignificant amount: asset transfer tax, excise duty, tax on certain insurance premiums, and withholding tax.

Financial year 2014
Key figures for taxation, TEUR Finland
Net sales* 10,350
Profit/loss before taxes -42,846
Number of personnel 78
Financial year 2014
Taxes paid, TEUR Finland
Taxes on income 136
Employer's contributions 1,270
Taxes on immovable property 19
VAT on services and purchases, not deducted ** 428
Total 1,854
Taxes payable, TEUR Finland
Employee tax payments (PAYE) 1,981
VAT, difference between payable and deducted -1,024
Total 957
Taxes paid and taxes payable, total 2,811
In addition, Finnish Industry Investment Ltd's subsidiary Aker Arctic Technologies Inc. received public support of 228 thousand euros in 2014.
* With the exception of Aker Arctic Technologies Inc., Finnish Industry Investment Ltd's group companies do not have any net sales. Aker Arctic Technologies Inc. was included in Finnish Industry Investment Ltd's consolidated financial statements for the first time in financial year 2014.
** Except for Aker Arctic Technologies Inc., Finnish Industry Investment Ltd's group companies do not have any sales that are subject to value-added tax (VAT). For this reason, these companies cannot deduct or offset VAT from their purchases.

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