The main principles and guidelines of UPM’s taxation are described in our Tax Policy which is based on the standards of behaviour of our Code of Conduct. The Tax Policy and any change to it is approved by the Chief Financial Officer.


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.

Main principles of taxation

The main principles of UPM’s taxation are:

  1. Compliance with applicable law.
  2. Management of tax risks, both financial and non-financial.
  3. Transparency of tax issues and overall requirement of commercial rationale concerning tax-related transactions.
  4. Continuous enhancement of shareholder value by aiming for efficient, optimum and cost effective tax processes, business transactions and structures.

Transfer pricing

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 taxation

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.

Structuring of business operations and transactions

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.