Tax footprint

Suominen’s tax footprint represents the economic impact on society arising from Suominen’s operations in the countries where it operates. Suominen’s business operations result in liabilities to pay taxes and similar payments, as well as in a liability to collect and remit taxes and similar payments that arise purely from the business activities of the group companies.

Suominen’s tax footprint arises purely from the business operations in the countries where it operates and Suominen has not entered into any arrangements aiming to change or rearrange its tax burden from what arises from normal business operations. The trading of goods between Suominen group companies is extremely limited. The group companies receiving intra-group services are charged a service fee. The pricing of the service fee is in line with the arm’s length principle.

Suominen has companies only in those five countries – Brazil, Finland, Italy, Spain and the United States – where it has both production and sales operations. In respect of taxes and similar payments, Suominen applies the laws and regulations of each country.

The main markets of the Finnish group companies are abroad. Due to this, the export sales of these companies significantly exceed their domestic sales. No value added tax is levied on export sales. This leads to a situation where the Finnish group companies’ deductible value added tax on their purchases subject to value added tax is considerably higher than the value added tax they remit based on their taxable sales. As a result, Suominen receives a refund of value added tax in Finland.

Suominen’s tax footprint includes not only the taxes and similar payments that are group companies’ costs but also the taxes and similar payments which the group companies collect and remit, such as indirect taxes. Deferred taxes, which arise from the timing differences between taxation and accounting and are recognized in the financial statements, are not included in the tax footprint.

In 2021, Suominen employed on average 709 people in its operations. As a result, Suominen generated a positive economic contribution to the surrounding society in the form of employees’ income taxes, as well as social security contributions by both the company and the employees. Thus, Suominen’s tax footprint includes also the collected and remitted employees’ income taxes as well as social security contributions, but the employer’s taxes are clearly separated from the employees’ taxes and payments in the report.

Suominen’s corporate income taxes have been significantly affected by tax losses generated in the past in certain countries where Suominen operates. Based on local tax laws and regulations, tax losses are normally carried forward and deducted from the taxable profits generated in the future. In 2021, Suominen’s taxable result did not incur major corporate income tax payments in Finland, as it has had tax losses carried forward from past years. Suominen is subject to group tax consolidation methods in several countries based on each country’s tax laws and regulations, which effectively means that Suominen’s local companies are taxed on the local consolidated taxable income.

During the previous reporting period, Suominen utilized in the USA the COVID-19 related tax reliefs, which allowed companies to carry back losses to past years. This resulted in Suominen receiving a federal corporate income tax refund from prior years and decreased the total federal corporate income taxes for 2020.

The group companies also pay property and real estate taxes based on the land and buildings they own as well as different fiscal payments levied, for example, on manufacturing operations. Suominen does not consider these as indirect taxes to be collected and remitted but as taxes that are costs for the Group companies.

Taxes and similar payments borne

 

2021

 

2020

EUR thousand

Finland

Other
countries

 

Finland

Other
countries

Corporate income tax, tax on profit

-1,166

-3,678

 

-2

-2,851

Property taxes1

-73

-975

 

-73

-984

Employer contributions and taxes

-1,727

-9,807

 

-1,786

-10,215

VAT as expense

-20

-4

 

-20

-5

Custom duties on export2

-

-15

 

-

-22

Custom duties on import2

-342

-1,835

 

-450

-1,305

Excise duties

63

-458

 

-18

-151

Other taxes and similar payments

-28

-320

 

-21

-525

TOTAL

-3,294

-17,093

 

-2,370

-16,059

 

Taxes and similar payments collected and paid

 

2021

 

2020

EUR thousand

Finland

Other
countries

 

Finland

Other
countries

Net VAT

3,242

-7,786

 

3,355

-4,887

Payroll taxes and similar payments collected and paid

-3,417

-8,764

 

-2,936

-8,650

Withholding taxes on various payments

-791

-113

 

-150

-121

TOTAL

-967

-16,664

 

269

-13,658

  1. Taxes on real estates
  2. Custom Duties are borne by the company importing or exporting goods. Custom duties are not collected and/or paid by some other tax payer. For these reasons custom duties are reported as taxes borne.