Nokia 2006 Annual Report Download - page 122

exchange transfers. Otherwise, the transfer tax would be payable at the rate of 1.6% of the transfer
value of the security traded.
Finnish Inheritance and Gift Taxes
A transfer of an underlying share by gift or by reason of the death of a US Holder and the transfer of
an ADS are not subject to Finnish gift or inheritance tax provided that none of the deceased person,
the donor, the beneficiary of the deceased person or the recipient of the gift is resident in Finland.
NonResidents of the United States
Beneficial owners of ADSs that are not US Holders will not be subject to US federal income tax on
dividends received with respect to ADSs unless this dividend income is effectively connected with the
conduct of a trade or business within the United States. Similarly, nonUS Holders generally will not
be subject to US federal income tax on the gain realized on the sale or other disposition of ADSs,
unless (a) the gain is effectively connected with the conduct of a trade or business in the United
States or (b) in the case of an individual, that individual is present in the United States for 183 days
or more in the taxable year of the disposition and other conditions are met.
US Information Reporting and Backup Withholding
Dividend payments with respect to shares or ADSs and proceeds from the sale or other disposition of
shares or ADSs may be subject to information reporting to the IRS and possible US backup
withholding at the current rate of 28%. Backup withholding will not apply to a Holder, however, if
the Holder furnishes a correct taxpayer identification number or certificate of foreign status and
makes any other required certification or if it is a recipient otherwise exempt from backup
withholding (such as a corporation). Any US person required to establish its exempt status generally
must furnish a duly completed IRS Form W9 (Request for Taxpayer Identification Number and
Certification). NonUS Holders generally are not subject to US information reporting or backup
withholding. However, such Holders may be required to provide certification of nonUS status
(generally on IRS Form W8BEN) in connection with payments received in the United States or
through certain USrelated financial intermediaries. Backup withholding is not an additional tax.
Amounts withheld as backup withholding may be credited against a Holder’s US federal income tax
liability, and the Holder may obtain a refund of any excess amounts withheld under the backup
withholding rules by filing the appropriate claim for refund with the Internal Revenue Service and
furnishing any required information.
Changes in income tax convention between Finland and the US
There have been recent proposals regarding the tax convention between the US and Finland, that
may affect our US shareholders. These proposals relate to the elimination of withholding taxes on
dividend payments for pension funds and for certain parent and subsidiary company relationships.
The proposals have been ratified in Finland but remain subject to approval in the US. If the
proposals are approved in the US by the end of 2007, the proposed elimination of withholding taxes
on dividends will become effective with regard to dividend income on or after January 1, 2007.
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