Helsinki (29.10.2013 - Heikki Jokinen) Most of the multinational companies active in Finland prefer to keep silent about their tax footprint. The German pharmaceutical giant Bayer is not one of them, and for a good reason: they pay full corporate tax for their companies in Finland.

The Nordic region headquarters of Bayer is located in Espoo, Finland. They also run a pharmaceutical factory in the city of Turku. Bayer has some 800 employees in Finland and 110,000 globally.

In 2011 Bayer was the third biggest corporate tax payer in Finland (84 million euro), leaving behind many multinationals based here, like UPM-Kymmene, Metsä Fibre and another pharmaceutical company Orion.

"The principle of our company is to pay tax where the added value is born. Naturally, we want to give our share to the country where we are active", said Bayer North Europe director Oliver Rittgen in an interview with the newspaper Helsingin Sanomat.

Not every Finnish company thinks the same way. The major private health care company Mehiläinen has for some time been the focus of critical discussion in respect of company tax avoidance.

The Swedish Ambea Group owns the latter and two years ago it was revealed that Mehiläinen paid almost no company tax on its profit due to the loans inside the group.

Ambea is owned by a private equity firm, Kohlberg Kravis Roberts & Co (KKR), based in the United States, and the investment firm Triton - which is registered in tax haven Jersey.

New law in effect next year

The discussion around Mehiläinen was intense as it is a major actor in privatised public health care services. The key question asked was whether Finnish tax-payers’ money for health care ends up in tax havens.

Mehiläinen has now issued a full report on its tax footprint, a move they call rather uncommon in Finland. They calculate and publish all their personnel expenses and VAT. However, Mehiläinen still paid only 1.7 million euro corporate tax last year out of a profit of 27.2 million euro. It is slightly more than the 0.6 million euros paid the year before.

Some weeks ago the newspaper Hufvudstadsbladet published a list of how much corporate tax a number of large companies operating in Finland paid in 2011. The figures below represent the corporate tax percentage of their turnover.

Mehiläinen 0.2 per cent, health care company Terveystalo 0.2, UPM Kymmene 0.7, Wärtsilä 1.2, Fortum 1.5, Nordea 2.9, Orion 3.0, ABB 3.3, Sampo Bank 4.1, Sandvik Mining & Construction 4.9, Metsä Fibre 5.5, Rolls-Royce 8.0 and Bayer 16.5.

The storm around Mehiläinen sparked a debate on the need for better legislation. From the beginning of this year the law restricts a company’s right to deduct interest payments from their corporate tax. The law will come into effect in 2014.

At the same time revenues from corporate tax are expected to decline, as the tax rate will be cut from the beginning of year 2014 to 20 per cent from the previous 24.5 per cent.