Yukos Appeals Against Latest Back Tax Claim

by Tatiana Smolenskaya, Tax-News.com, Moscow

03 February 2006

Russian oil company Yukos has announced that it is appealing the Federal Tax Service's latest "dubious" tax claim against the company, arguing that the $3.5 billion demand is "unfounded."

The claim, received by Yukos on December 27 and relating to the 2004 tax year, states that underpayment of taxes, duties and levies amount to 54 billion roubles. In addition the company has been charged an extra 42 billion roubles in penalties, and 11 billion roubles in surcharges.

“The company does not recognize the unfounded $3.5 billion claim and sent relevant objections to the tax authorities on January 27. Taking into account the new tax claims, the tax bill demanded of Yukos by the authorities totals $9.8 billion,” the company said in a statement.

By early December 2005, Yukos and its subsidiaries had paid a total of $21.3 billion of the "dubious tax claims" laid against it by the Russian authorities, reducing its tax liabilities to $6.3 billion, according to the company.

The authorities are alleging that the latest tax claim stems from non-payment of VAT on export revenues from the sale of crude oil and refined products by a number of trading companies affiliated with Yukos. The company, however, says that it owes just 3 billion roubles of the 54 billion rouble claim.

Yukos has also pointed out that the latest tax claim means that the company was charged 8 roubles of taxes per 1 rouble of revenue. With additional, fines, penalties and surcharges, this increases to 15 roubles of tax for every 1 rouble earned, the company has claimed.

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