Nokian Tyres contributes to society and communities through the payment of salaries and taxes. We directly employ around 4,600 people around the world. When we include all of our subcontractors, our role as a job creator ecomes even more significant. Our tire factories are
significant employers. The salaries and taxes that we pay support the structures of society and improve the quality of life for thousands of people.
The Group’s tax rate in 2020 was 18.9% (-18.7% in 2019). In 2020, the tax rate was affected by write downs of deferred tax assets. Adjusted estimated operational tax rate (ETR) without write downs was 13.1%.
The tax rate is positively affected by tax incentives in Russia, which are valid until approximately 2022. The estimated operational tax rate is expected to be at the level of 19% for 2021.
INCOME TAX EXPENSE
|Russia and Asia||14.2|
In 2020, Nokian Tyres began drafting a Tax Policy. It was finalized in early 2021, and approved by the Board in February 2021.
You can read more from our Financial Review 2020.
A EUR 100 MILLION LOAN AGREEMENT – TERMS LINKED TO SUSTAINABILITY TARGETS
In May 2019, Nokian Tyres signed a sustainability linked loan agreement with the OP Corporate Bank. The EUR 100 million five-year loan is used for paying off a similar sized loan which was due in May.
Sustainable financing is trending rapidly around the world, and Finnish companies are showing increasing interest towards these types of loan agreements. Financing that is linked to sustainability goals is a way for companies to match their finance strategies even more closely together with corporate sustainability. This makes the goals of corporate sustainability more concrete.
The margin of the loan will increase or decrease dependent on Nokian Tyres meeting three sustainability key performance indicators:
1. Commitment to the indicators defined according to the Science Based Targets initiative, which has been created to lower greenhouse gas emissions.
2. Auditing the human and labor rights in natural rubber processing plants.
3. Reducing workplace accidents.
”All three areas require more steps forward. Reaching our targets means continuous improvement”, says Nokian Tyres VP, Quality & Sustainability Teppo Huovila.
Concrete targets linked to financing also help the financiers to have a meaningful discussion on sustainability and supporting the progress of these targets together with clients.