The PricewaterhouseCoopers Audit press service reported yesterday that the company does not agree with the court's decision and intends to appeal it to the Supreme Arbitration Court (in the photo).
Photo: Ilya Pitalev
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Court Allows Tax Claims against PwC
An appeals court ruled yesterday that the tax claims of over 300 million rubles against ZAO PricewaterhouseCoopers Audit for 2002 are legal. This is the second time the court has made that ruling. The case went through three appeals in 2006. On July 10, 2007, the Supreme Arbitration Court ruled that the case should be heard anew. The appeals process in the end only undermined PwC's position, since the court not only found for a second time that 500 million rubles in expenses paid by the Moscow office of the Dutch PricewaterhouseCoopers Resources B.V. (now PricewaterhouseCoopers Russia B.V.) were unjustified, it ruled that the payments were a violation of the company's license as well.
Lawyers for PwC tried to show that the payments in question, made to foreign specialists, were for consulting and not for auditing, for which a license is required. When asked by the court to document the nature of the payments, they produced company documents where the activities were described as “brainstorming,” which did not allay the court's doubts. Representatives of the Federal Tax Service pointed out that PwC had changed its account from the first trial.
PwC has issued a statement saying that it will appeal this decision as well. Meanwhile, tax authorities hope that the decision will affect their case against Ernst & Young, which faces claims of 390 million rubles from 2004 based on analogical charges.
www.kommersant.com
All the Article in Russian as of Apr. 15, 2008
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