Mining 2025

FINLAND Law and Practice Contributed by: Tarja Pirinen, Fiiu Linninen, Teija Lius and Marko Koski, HPP Attorneys Ltd

transferred to another operator, the new holder of the permit is liable to pay mining mineral tax after the mining authority’s approval of the trans - fer has become enforceable. The tax for metallic minerals is 0.6% of the ore’s taxable value. FTA will assess taxable values annually based on arithmetic means on previous years, with international prices using sources such as LBMA, LME and NYMEX. Tax for other mining minerals is EUR0.2 per tonne. The mining operators must register with FTA before starting activities subject to the mining mineral tax. The tax period for mining mineral tax is a calendar year and therefore the first tax return must be filed, and the tax paid, by 12 March 2025. The revenue collected from the mining mineral tax is estimated to be around EUR25 million annually. In addition to the mining mineral tax, a Finnish- resident entity is subject to corporate income tax on its worldwide income, and a non-resident entity on its Finnish source income. A company is resident in Finland on the basis of incorpora - tion. Entities whose place of effective manage - ment is located in Finland are also considered to be resident taxpayers. A permanent estab - lishment (PE) is created according to the appli - cable tax treaty and principles of OECD model convention. For example, mine, quarry, oil well, natural gas well, or other site for the extraction of natural resources, as well as a branch, cre - ates a PE. The income tax rate for limited liability companies and other corporate entities is 20%. As a rule, the Finnish tax resident payor must withhold 20% tax at source from dividends paid to a non-resident corporate entity, unless a tax treaty limits Finland’s right to tax. Most Finnish tax treaties provide the source state with the

right to withhold tax at source of 10–15% on dividends other than direct investment dividends received by corporate entities. Tax at source of 0–5% can usually be withheld on direct invest - ment dividends. No withholding tax is imposed on dividends paid to a company referred to in the EC Parent-Subsidiary Directive owning at least 10% of the capital of the payer. Interest pay - ments to non-residents are usually tax-exempt according to the Finnish Income Tax Act. Finland has adopted ATAD 1 interest deduc - tion limitation rules. According to Finnish leg - islation, interest expenses are deductible if the total net interest expenses to both related and unrelated parties of a company do not exceed a EUR500,000 threshold in a tax year. If net inter - est expenses exceed this threshold, the limita - tions would be applied to the total amount and not just the amount exceeding the threshold. If the threshold is exceeded, only net interest expenses of up to 25% of the adjusted tax - able profit (taxable EBITD) are deductible. The net interest expenses to third-party debts are deductible with a EUR3 million limitation. The land and buildings of properties used for mining are subject to real estate tax, just like other properties of industrial plants. General real estate tax is paid to municipalities, and it varies between 0.93% to 2%. The New Environmental Damage Fund will take effect on 1 January 2025. These funds are part of the secondary environmental liability systems, and they are collected as tax-like environmen - tal liability contributions from operators whose activities may pose a risk of environmental pol - lution. The liability contribution for mining opera - tors is between EUR2,700 and EUR30,000 annu - ally.

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