Lawyers say Ikea not guilty of 32 bln rbl tax nonpayment in Russia

MOSCOW, Oct 26 (PRIME) -- Swedish furniture maker Ikea is not guilty of non-payment of 32 billion rubles of corporate profit tax because the tax has been already paid to the German budget, AIB, the law bureau, which protects Ikea’s interests, said in a statement on Wednesday.

Earlier on Wednesday, Russian investigators initiated a criminal case against Ikea, suspecting it of tax avoidance, according to documents seen by PRIME.

According to AIB, “the Investigative Committee of the Moscow Region renders the stipulations of the agreement (on double taxation avoidance) between Russia and Germany substandardly, in contradiction with the already established international practices.”

The investigators of the Khimky city office said that Ikea Einrichtungs GmbH sold its 99.9% stake in Ikea Mos in August 2011 for 84 million euros, or an equivalent of about 35 billion rubles at that time, while the market price of the stake amounted to 162 billion rubles, as experts believe.

“Since Ikea Einrichtungs GmbH is a German resident, the profit tax was paid to the German budget by the company,” AIB said.

The investigators said that the parties of the deal “hid the activities of foreign legal entities in Russia via affiliated foreign agents and paid tax in an amount unrelated to the real value of the sold stake, to a sum about 4,000 times lower than the tax which needed to be paid.”

Ikea Einrichtungs has not registered a permanent representation in Russia, which allowed it to hide the fact that the deal took place, the investigators said.

Ikea has also been in land disputes with Khimky city’s land owner KSKhP Khimky for several years. In 2011, the city administration withdrew a land plot from KSKhP Khimky and leased it out to Ikea, which became the land’s owner the same year. In 2012, KSKhP Khimky turned to courts, challenging Ikea’s ownership of the land.

(62.0480 rubles – U.S. $1)

End