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FINLAND: Minister on board of tax haven firm

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15.9.2015 20:02

UUTISET FINLAND

Finland’s Transport minister is a board member at a company set up to help avoid taxes. Anne Berner joined the board of the Saltri II LuxCo company in December 2012. According to the Luxembourg register of companies she remains on the board even though she was elected to parliament and chosen as a minister earlier this year.

The firm is engaged in transfer pricing, that is the buying and selling of services between companies within the same group but across national borders. In this case the Luxembourg firms borrowed money from subsidiaries in Finland, and were able to pay less tax as a result. The Finnish firm’s tax bill was also reduced as the money was not then counted as profit.

This is the first known case of a minister serving on the board of a company engaged in tax planning. Berner says she has already given notice of her resignation from the Luxembourg firm.

"I looked into the matter and it’s enough that I have handed in my resignation," said Berner. "It’s almost impossible to ensure that everything is in the right register in time."

Berner had served on the board of the flooring company Karelia-Upofloor, before a merger with the Swedish firm Kährs in 2012. After that she served on board of the Luxembourg-registered holding firm, as well as Kährs.

The merger made investment company Triton the 61 percent owner of the new company, but Triton’s complicated ownership structure included several holding companies in Luxembourg.

Triton claims this is simply a practical way of gathering capital from international investors, but it also allows for a degree of tax planning. Berner herself said that she felt her duty was to protect shareholders in the Finnish firm, and to ensure that their capital gains were taxed in Finland.

However Kährs has made big loans to the Luxembourg based firms, as has Karelia-Upofloor. The companies say these loans are part of normal funding strategies, but they do allow the borrowing company to write off the interest payments against tax liabilities, and the lending firms have lower taxable profits.

Source: http://yle.fi/uutiset/minister_on_board_of_tax_haven_firm/8308263