Nokia 2009 Annual Report Download - page 163

residents’ Income). A lower rate than 15% may be applied based on the applicable treaty for the
avoidance of double taxation only when the following information on the beneficial owner of the
dividend is provided to the payer prior to the dividend payment: name, date of birth or business ID
(if applicable) and address in the country of residence.
US and Finnish Tax on Sale or Other Disposition
A US Holder generally will recognize taxable capital gain or loss on the sale or other disposition of
ADSs in an amount equal to the difference between the US dollar value of the amount realized and
the adjusted tax basis (determined in US dollars) in the ADSs. If the ADSs are held as a capital asset,
this gain or loss generally will be longterm capital gain or loss if, at the time of the sale, the ADSs
have been held for more than one year. Any capital gain or loss, for foreign tax credit purposes,
generally will constitute US source gain or loss. In the case of a US Holder that is an individual, long
term capital gain under current law generally is subject to US federal income tax at preferential rates.
However, these rates currently are scheduled to expire on January 2011. The deductibility of capital
losses is subject to significant limitations.
The deposit or withdrawal by a US Holder of shares in exchange for ADSs or of ADSs for shares under
the deposit agreement generally will not be subject to US federal income tax or Finnish income tax.
The sale by a US Holder of the ADSs or the underlying shares, other than an individual that, by reason
of his residence in Finland for a period exceeding six months, is or becomes liable for Finnish income
tax according to the relevant provisions of Finnish tax law, generally will not be subject to income tax
in Finland, in accordance with Finnish tax law and the Treaty.
Finnish Capital Taxes
The Finnish capital tax regime was abolished in the beginning of 2006.
Finnish Transfer Tax
Transfers of shares and ADSs could be subject to the Finnish transfer tax only when one of the parties
to the transfer is subject to Finnish taxation under the Finnish Income Tax Act by virtue of being a
resident of Finland or a Finnish branch of a nonFinnish credit institution. In accordance with the
amendments in the Finnish Transfer Tax Act (applicable as of November 9, 2007) no transfer tax is
payable on the transfer of shares or ADSs (irrespective of whether the transfer is carried out on stock
exchange or not). However, there are certain conditions for the exemption. Prior to the said
amendments, transfer tax was not payable on stock exchange transfers. In cases where the transfer
tax would be payable, the transfer tax would be 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.
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