Financial responsibility

Financial responsibility

Our financial responsibility is based on our company’s financial success and ability to create value for stakeholders.

Nokian Tyres contributes to society and communities as a responsible employer and through the fair payment of salaries and taxes. Our tire factories are significant employers in their operating areas. When we include all of our subcontractors, our role as a job creator becomes even more significant. 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 effective tax rate (ETR) in 2023 was 12.3 percent (negative in 2022). The tax rate was affected by the sale of the Russian operations causing tax exempt revenues. 

income tax expense
Region M€ in 2023
Nordic countries -9.4
Other Europe 1.0
North America 4.4
Other 5.7

global tax policy

Nokian Tyres has adopted a Tax policy, approved by the Board of Directors, which defines general framework and guidelines for tax matters administration and decision making, roles and responsibilities related to taxation and key measures and controls in the Nokian Tyres Group. The policy is aligned with other internal key policies, manuals and instructions related to the tax management, e.g. Code of Conduct.


In line with Nokian Tyres Corporate Strategy, the key overall goals directing Nokian Tyres’ tax policy are

  • continuous enhancement of shareholder value on a sustainable basis,
  • adherence to applicable laws and regulations and
  • protection of Nokian Tyres' reputation and brand.
Key principles
  • Nokian Tyres pays the amount of tax legally due in any territory in accordance with rules set by the relevant authorities. Within this the Group has a responsibility to its shareholders to ensure that strategic business objectives are met without incurring unnecessary tax costs.
  • The Group is committed to maintaining an open, professional, and transparent relationship with tax authorities.
  • Nokian Tyres is committed to responsible and ethically acceptable principles in all its activities. The Group does not engage in highly aggressive or artificial transactions whose sole or main purpose is to generate a tax advantage. In particular, the Group will not enter into any tax planning arrangements that aim to achieve a tax result that is contrary to the clear intentions of applicable governments, nor any tax planning arrangements that rely on anything other than full disclosure to relevant tax authorities.
  • The Group will not promote any arrangements to other parties (including customers) unless it reasonably believes that the tax result of those arrangements for the other parties is not contrary to the intentions of government.
  • The Group will only implement remuneration packages for employees which are structured so that the Group reasonably believes that the proper amounts of tax and national insurance contributions are paid on the rewards of employment.
Roles and responsibilities
  • Head of Tax has overall responsibility for Nokian Tyres tax matters with authority and responsibility to take part in any tax related decision making which may have impact on the Group’s tax cost or tax risk position. Head of Tax will ensure that Nokian Tyres Group’s overall interest is considered in all tax related matters. Head of Tax reports to Nokian Tyres’ Chief Financial Officer (CFO), who has authority and responsibility to take part in material tax related decision making and responsibility to report to Audit Committee, when any material tax related matter or risk would arise.
  • The Group Tax is accountable for the group-level tax planning and use of external tax advisors. It is also responsible for Nokian Tyres’ global transfer pricing model and legal structuring.
  • Financial Control is responsible for tax compliance and tax reporting of the respective legal company in line with local legislation, the tax policy and the instructions given by Group Tax.
Tax compliance

Nokian Tyres is committed to complying with all applicable laws and regulations. In the context of tax, this commitment is understood to comprise the following:

  • Pay all tax Nokian Tyres is legally obliged to pay as and when it becomes payable;
  • Comply with relevant tax laws and regulations and the spirit of these laws and regulations;
  • Take advantage of available rulings, clearances, similar concessions or reliefs;
  • All tax returns are reviewed by someone other than the preparer;
  • Submit returns on a timely basis and accurate manner;
  • Promptly report any detected material errors or omissions in tax filings to relevant tax authorities; and
  • Respond to tax enquiries and audits in an open, honest and timely manner.
Transfer pricing

Nokian Tyres is committed to follow the arm’s length principle in its transfer pricing. All transfer prices must comply with the arm’s length principle as defined in the OECD transfer pricing guidelines for multinational enterprises and tax administrations.

Tax risk management

Tax risks are managed in align with Nokian Tyres Risk Management Policy approved by the Nokian Tyres Board. Tax risks are managed by Group Tax and any known material tax risks are reported to the Audit Committee.

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