As a main principle, UPM is committed to paying all the relevant statutory indirect, direct and other taxes and to filing, reporting and disclosing the information required to comply with the prevailing legal requirements and transparency objectives of UPM.
The Tax Policy concerns all employees working on UPM transactions and especially on tax matters. Where compliance processes or other tax assignments have been outsourced, an outside service provider shall ensure that these principles are equally adhered to.
The policy is complemented by UPM Tax Risk Management Instructions which include definitions of the various roles and responsibilities related to taxation within UPM.
The main principles of UPM’s taxation are:
UPM recognises the importance of documenting the rationale of the transfer pricing method chosen for each transaction. The policy of UPM is to follow the arm´s length standards as stated in the OECD Guidelines. The arm´s length principle applies to all inter-company transactions, including sale/purchase of goods, provision of services, loans and advances and the usage of tangible property and intangible rights.
Transparency of tax issues is supported by appropriate and regular reporting on taxes. UPM is committed to presenting all relevant information to the tax authorities or to other similar bodies for correct tax treatment of transactions and in order to avoid any major tax-related disputes later on. Advance rulings or similar assurances are applied to support tax assumptions made in significant transactions or in uncertain tax positions.
All tax transactions must be based on commercial rationale and business reasoning. The location of UPM group entities in low tax jurisdictions will therefore be driven by operational business reasons, such as the location of customers, suppliers, raw materials, know-how or other similar considerations. To optimise payment of taxes, local and global structures such as tax groups or similar arrangements are applied where possible.