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: would Nokian Renkaat Oyj have to pay corporate tax? If yes, the when and how much? Assume that the corporate tax rate is 20%.