Norwegian Government Intervenes In VimpelCom Tax Dispute

by Tatiana Smolenskaya, for LawAndTax-News.com, Moscow

14 December 2004

The Norwegian government has expressed concern regarding the recent move by the Russian authorities to claim $158 million in back taxes from VimpelCom, Russia's second largest mobile phone company.

The claim, which the firm says relates to the deductibility of a wholly owned subsidiary's expenses for the year 2001, is substantially larger than the $47 million the company made in net profit that year, and VimpelCom has said that it intends to contest the accusation that it has failed to fulfil its tax obligations.

The move is being viewed by many as another politically motivated action against Russia’s oligarchs. However, it has alarmed the Norwegian government, as Norway's state-controlled telecoms provider, Telenor owns a 29% stake in VimpelCom.

According to reports in the European media, Norway's Trade Minister, Boerge Brende has suggested that the allegedly oversized claim must be an "unintentional error", adding that:

"We expect that VimpelCom and Telenor will be treated in line with other companies in Russia. They should pay the tax that they should and not more."

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