Tax impact

We pay corporate income taxes where added value is created and where profit is generated. Taxes are paid in accordance with the local tax legislation and regulations of the country in question. Our positive financial performance also generates higher corporate income tax revenues. Due to our corporate and operational structure, we mainly report and pay our corporate income taxes in the countries of production and in the countries where innovations are being developed.

In addition to the taxes we pay on income, our various production inputs and outputs are also subject to taxation. These are typically local taxes in the countries of production (for example, energy taxes, real estate/land and property taxes) or in the countries where our customers are located (for example, value added taxes, customs and duties and various excise taxes). These taxes may either be paid or collected by UPM for further remittance to tax authorities. In addition to these taxes, our local impact is augmented by the taxes paid in local communities by our employees and by those indirectly employed by us.

Tax compliance

In accordance with UPM's Tax Strategy, the locations of our companies are driven by commercial rationale and business reasoning. In addition to our strict compliance with tax laws and regulations, UPM follows the arm’s length principle for related party transactions.

UPM is committed not to transfer any value created and does not have any investments in production or service operations in jurisdictions defined by the Council of the European Union as non-cooperative jurisdictions for tax purposes or in any similar secrecy jurisdictions.

UPM’s Board of Directors’ Audit Committee is responsible for the supervision of tax risk management as part of our risk management processes. UPM’s internal control and risk management operations review tax risks regularly and update the control framework together with the tax function. A more thorough review of the tax practices of customers and suppliers is a part of our counterparty risk management processes.

UPM Tax Strategy is supported by internal instructions, benchmark analysis of best practices and related internal controls. Tax matters are managed by our tax function, which is complemented by third-party tax services to comply with local tax reporting, filing and other requirements.

According to the UPM Tax Strategy, we are committed to presenting all relevant information to the tax authorities or to other similar bodies, to ensure the correct treatment of transactions with regards to taxation and in order to avoid any major tax-related disputes at a later date. Advance rulings or similar assurances are applied to support tax assumptions made for significant transactions or in uncertain tax positions.

We aim to co-operate transparently and proactively with tax authorities, and value dialogue with other important stakeholders concerning taxation. In Finland, UPM co-operates with the Finnish Tax Administration.

The UPM Report Misconduct channel can be used to report any concerns related to non-compliance with the UPM Tax Strategy.