Finland can be compared to developing countries where mining companies can exploit mineral resources without leaving legitimate compensation for the communities. Picture: Cifor, CC BY-NC 2.0


Finnish corporate responsibility research NGO Finnwatch sheds light on taxation of corporations mining metallic ores in Finland in its report published today. Aggressive tax planning arrangements of two Canadian mining corporations decreased Finland's tax income by 49 million euro in the period 2011–2014.

– The tax losses are massive compared to the combined corporate income tax of 92 million euro paid by all the 12 metallic ore mines located in Finland during the same period. Meanwhile, ores worth nearly 4 billion euro have been mined from the Finnish earth, says Finnwatch tax specialist Lauri Finér.

The Finnwatch report provides an in-depth tax planning analysis of Canadian multinationals Agnico Eagle Mines and First Quantum Minerals. First Quantum Minerals operates two mines in Northern Finland. Agnico Eagle mines gold in Lapland. The three mines are among the most profitable in Finland.

– Finland gives up its ores on the cheap. In this sense Finland could be compared to developing countries, where mining corporations can exploit mineral resources without leaving legitimate compensation for the communities, says Finér.

The main problem lies within national laws and international tax conventions. The multinational corporations can affect where they show taxable profits. The Finnwatch report points out differences in firms' tax planning policies that exploit these possibilities. For instance, the tax arrangements of First Quantum Minerals were more aggressive compared to those of Agnico Eagle Mines.

The deficiencies in Finnish mining legislation allow foreign corporations to extract ores without leaving legitimate revenues in Finland. The Finnwatch report illustrates that introducing specific mining royalty taxes and limiting tax deductibility of intra-group interests are effective ways to secure reasonable benefits for the country where the mines are located. It is also important to negotiate international tax treaties that allow the location country to tax capital gains from mining concessions.

Inclusive resolution requires cooperation between governments. Finnwatch considers that governments should more actively seek solutions within international organisations such as the OECD, the EU and the United Nations. A sustainable solution would be abandoning the arm's length principle and separate entity accounting for common consolidated corporate tax base proposed by the European Commission.

The report Undeveloped mining taxation is currently available only in Finnish, but will be published in English later this year.

Additional information:
Lauri Finér, researcher
lauri.finer (a) finnwatch.org
tel. +358 40 410 9710

Finnwatch is a non-governmental organisation focused on global corporate responsibility. Finnwatch seeks to promote ecologically, socially and economically responsible business by influencing companies, economic regulation and public discourse. Finnwatch member organisations are Finnish development and environmental organisations and trade unions.

Tämä teos, jonka tekijä on Finnwatch, on lisensoitu Creative Commons Nimeä-EiKaupallinen-EiMuutoksia 4.0 Kansainvälinen -lisenssillä.