VimpelCom’s 2001 Back Tax Bill Is Significantly Reduced

by Tatiana Smolenskaya, Tax-News.com, Moscow

04 January 2005

Russian mobile phone firm VimpelCom announced last week that a final review of its tax position by the authorities for the year 2001 has resulted in a significantly reduced bill for outstanding taxes and penalties of $17.6 million.

The final tax bill represents a dramatic reduction of the $157 million claim for back taxes, fines and penalties dished out by the tax inspectorate after its preliminary assessment for the 2001 tax year.

According to the firm, a “significant portion” of the final tax claim (some $9.1 million) is the result of the authorities claiming that value added tax offsets were made incorrectly.

The firm revealed that it plans to pay the value added taxes for 2001 and make offsets of these amounts in later tax years.

Whilst disputing the tax authorities’ final claim, VimpelCom has agreed to pay the entire sum demanded, although the firm indicated that it is considering an appeal against part or all of the bill.

Commenting on the announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, stated: "We are grateful for the active role of several senior government officials, including officials who are very knowledgeable of the Russian tax code. The overall process between the tax authorities and ourselves was constructive."

Recommended