Nokian Renkaat - Inside information

Nokian Tyres received EUR 59 million additional payable tax in Finland regarding year 2011; the company will appeal the decision

Nokian Tyres plc Inside Information October 3, 2017, 2:00 p.m.

Nokian Tyres plc has received a tax reassessment decision from the Tax
Administration, according to which the Company is obliged to pay EUR 59 million
additional taxes with punitive tax increases and interests concerning tax year
2011. Payment must be made in November 2017. The total sum demanded by the tax
authorities is EUR 59 million, of which EUR 39 million are additional taxes and
EUR 20 million punitive tax increases and interests.

The Company will record the 2011 total additional taxes of EUR 59 million in
full to the financial statement and result of Q3/2017.

The Tax Administration's ruling does not affect the company's dividend
distribution.

Background to the Tax Administration’s decision

Large Taxpayers’ Office carried out a transfer pricing tax audit regarding tax
years 2007-2011 during 2012-2013, investigating if the intercompany transactions
between Nokian Tyres plc and its subsidiaries were concluded based on market
prices. Company has already paid EUR 89.2 million additional taxes and punitive
tax increases concerning tax years 2007-2010 based on tax reassessment decisions
from the Tax Administration and has appealed them by filing an appeal to the
Administrative court in January 2017.

The Tax Administration states in the reasoning of its decision concerning 2011,
that the transfer pricing was market-based with all other but the Russian
subsidiaries. According to Tax Authorities the success of Russian business is
not based on the modern and efficient production plant in Russia combined with
the sales and logistic network covering whole Russia. Tax Administration
considers the Russian plant as a low risk contract manufacturer. The Tax
Administration has ruled that a significant part of the Russian subsidiaries'
profits should be added to Nokian Tyres’ taxable income in Finland. In practice
this leads to double taxation of income, which is contrary to existing tax
agreements.

Nokian Tyres to appeal against the decision

Nokian Tyres plc has consistently applied transfer pricing according to tax laws
and OECD guidelines prevailing at the time.

The Company has prepared a transfer pricing documentation which the Tax
Administration has ignored during the tax audit. The Company considers the
reassessment decision of the Tax Administration as unfounded and is going to
appeal to the Board of Adjustment and, if necessary, the Company will continue
the appeal process in the Administrative Court. If needed, the Company will also
require the competent authorities to negotiate on the elimination of the double
taxation.

Nokian Tyres plc

Antti-Jussi Tähtinen
VP, Marketing and Communications

Further information:
Mrs. Anne Leskelä, CFO, tel: +358 10 401 7481

Distribution: Nasdaq Helsinki, media, www.nokiantyres.com
Nokian Tyres is the world’s northernmost tyre manufacturer. The company promotes
and facilitates safe driving in demanding conditions. It supplies innovative
tyres for cars, trucks and special heavy machinery mainly in areas with special
challenges on tyre performance: snow, forests and harsh driving conditions in
different seasons. Nokian Tyres’ product development is consistently aiming
for sustainable solutions for safety and the environment, taking into account
the whole life cycle of the tyre. A part of the Nokian Tyres group, the tyre
chain Vianor has approximately 1,500 stores in 27 countries. In 2016 Nokian
Tyres had approximately 4,400 employees and net sales of approximately 1,4
billion euros. Nokian Tyres’ share is listed on the Nasdaq Helsinki. Further
information: www.nokiantyres.com