BAT denies Russian tax underpayment

Russian federal investigators have alleged that British American Tobacco’s local units have failed to pay tax amounting to upwards of RUB335 million, according to report by the Russian Legal Information Agency (RLIA) quoting an Izvestia newspaper story.

An investigation was opened in respect of BAT’s St. Petersburg, Saratov, and Moscow units, which are alleged not to have paid their taxes in full for the 2008-2009 period.

BAT Russia was said to have told Izvestia it hadn’t received any information from investigators about criminal cases having been opened.

At the same time, the company confirmed that the tax authorities had found violations in the company’s operations in 2008-2009, but that the conflict had been resolved earlier this month under a procedure set out in the law.

BAT representatives insist that they have been following internationally accepted business practices and believe the Russian tax authorities’ claims are ungrounded.

The RLIA said this was not the first time a large international company had had problems with the Russian tax authorities.