Ford Said To Be Facing Russian Back Tax Claim

by Tatiana Smolenskaya, Tax-News.com, Moscow

12 September 2005

Ford Motor Company's Russian operation is reportedly the subject of a "large" claim for back taxes by local tax authorities in St Petersburg.

According to a report by the Interfax news agency, which cited a source in the regional tax authority, the claim has arisen from a discrepancy between federal tax regulations and local laws governing tax breaks for investors.

Other sources revealed that Ford is facing two claims for back taxes, with a possible third claim also being prepared by the tax authority. It is thought that the company owes something in the region of 40 billion rubles (US$1.4 billion).

Ford was the subject of a tax claim from regional tax authorities earlier in the year, a claim which was subsequently annulled by an arbitration court in May. And a spokesperson for Ford has stated that the company has not received any recent claims for outstanding back taxes.

Ford is one of the largest investors in the St Petersburg region, and a spokesperson for the local tax authority told the Moscow Times that its accounts are checked on an annual basis. In June, the company announced additional investment of US$30 million in its Vsevolozhsk plant to double its output by January.

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