1. Nokian Renkaat Oyj is a Finnish company. In 2018 it earned a loss of 200m , in 2019 it earned a profit of 100m and in 2020 it earned a profit of 150m . In February 2018 it distributed 50m of dividends. It did not distribute any dividends again until February 2021 when it again distributed 50m of dividends. However, in 2019 it did pay some tax debts of two of its shareholders (amounting to 10m and 15m respectively); it deducted these amounts from its revenue when calculating its profit for 2019. The tax rate in Finland is 20%. Assume that Finland has a classical corporate tax system with an unlimited carry-forward.

1.1. Was the deduction by Nokian Renkaat Oyj of the two payments of 10m and 15m permissible?

1.2. How much corporate tax was due from Nokian Renkaat Oyj for each of 2018, 2019 and 2020?

1.3. Would your answer to the preceding question change if no carry-forward was available? If yes, then how?

1.4. What if Nokian Renkaat Oyj was an Estonian company, and Estonian corporate tax rules applied, which has distribution based system: would Nokian Renkaat Oyj have to pay corporate tax? If yes, the when and how much? Assume that the corporate tax rate is 20%.