Information to Ovako AB (publ) senior secured notes investors
As noted in the Ovako 2015 Annual Report, the tax authority in Finland has sought to limit the deductibility of interest expenses for the years 2010-2013. In light of existing practices for interest deduction in Finland during this period, and after consulting with external tax lawyers, Ovako has previously rejected the tax agency's claim.
Ovako Finland Oy has now received a tax reassessment notice from the Finnish tax authority. It entails a demand for payment of approximately EUR 9.5 million (including interest and penalties) by the end of January 2017. The demand relates specifically to interest expenses on loans from Ovako Finland Oy's Swedish parent company, Ovako AB (publ), which the tax authority deem non-deductible.
After consultation with external tax lawyers, Ovako disagrees with the reassessment from the Finnish tax authorities and will submit an appeal. Until the appeal is settled Ovako will not be required to pay the demand.
- - -