Legal Alert – New Proposed Finnish Energy Taxation Constitutes De Facto Mining Tax

The Finnish Government unexpectedly proposed amendments to the energy taxation of mining operations. The proposal constitutes a de facto mining tax. The decision was taken at end of March in connection with the Government reaching an agreement on central government spending limits for 2015–2018.

The Government decided to increase the energy taxation as regards mining operations. It is anticipated that the electricity tax rate for mining operations will be increased, and at the same time, mining operations would be excluded from the scope of energy tax cutter, which aims to support companies operating in energy-intensive branches. No precise information on the detailed structure is yet available, and the decisions still have to be approved by the Parliament, where the coalition Government, however, holds a majority. If enacted, these changes are, according to FinnMin and energy consumption figures for 2012, estimated to impose an annual tax burden of over EUR 20 M on the mining industry. The proposal and Government’s decision were not preceded by any consultation or public political discussion.