TNK Causes Troubles
// The company’s shareholders will become 7 billion rubles poorer
Tax discipline
TNK-BP announced yesterday receiving a notification from the Federal Tax Service on back taxes of 6.98 billion rubles for 2001. This is the second-largest tax claim against an oil company in Russia. TNK-BP is going to pay out the money until August 18. Afterwards, the company’s Russian shareholders, Alfa Group and Access/Renova, will have to return the sum to TNK-BP.
We remind our readers that officials at TNK-BP reported additional tax claims brought against the company for 2001 back in April saying the sum of back taxes for the VAT and profit tax had risen to 26 billion rubles from 4 billion rubles. Elena Tolgskaya, an official representative of the tax service said there were no additional claims against the company. It became known later that TNK-BP had received an act of the repeat tax inspection, and presented its objections to it, which resulted in the final sum of the tax claims dropping almost three times. The total sum of back taxes for 2001 currently amounts to 10.98 billion rubles, but the company keeps on disputing 4 billion rubles of them. The session of the Moscow Court of Arbitration considering the suit of TNK on the illegality of additional charging of the sum is due on September 21.
TNK-BP said yesterday it was going to pay out 6.98 rubles of back taxes by August 18, as it is provided for by the law. The company will continue to study the judicial aspects of the decision, though, which may be useful not only to appeal at courts but also to resolve a conflict between its shareholders.
All tax claims are officially forwarded to TNK, which entered TNK-BP company in 2004 (the Russian oil company holds 50 percent of stocks in the joint company). The agreement on the establishment of TNK-BP envisaged the companies’ several liability for their activities in Russia prior to the merger of their Russian assets. However, it will be TNK-BP holding that will pay out the claims, according to representatives of TNK-BP and BP.
“The issue will be discussed by Russian and overseas shareholders of the company after the close examination of the claims,” Vladimir Buyanov, spokesman of BP’s Russian office, told Kommersant. It would be logic to surmise that Alfa Group and Access/Renova, Russian shareholders of TNK-BP will have to return to the company the entire sum paid for the tax service.
Chiefs of TNK-BP stated that the payment of back taxes would have no effect on the company’s activities. “TNK-BP will continue to closely cooperate with state and supervisory bodies to provide them with latest and accurate information on the company’s activities,” the statement runs.
The sum of the claims against the company being not that significant for the company with the net profit amounting by US GAAP standards to $1.28 billion in the second quarter of 2005, the claims leveled are second-largest among Russian companies after YUKOS. Yet, TNK-BP is hundred times behind YUKOS in terms of sums of back claims.
Tax agencies are currently making checks on the activities of TNK-BP in 2002-2003. TNK-BP’s US GAAP-standard consolidated report for 2004 admits that at that period the company made transactions similar to those mentioned in the documents of the Federal Tax Service’s inspections. The tax service has as yet not provided the company even with preliminary information on the inspection in 2002-2003. “This information will probably depend on the decision of the Federal Tax Service on taxes for 2001,” the report reads. Thus, one can expect new tax claims against TNK-BP for 2002-2003 to appear soon.
Kommersant will track the development of the events.
by
Anna Skornyakova
All the Article in Russian as of Aug. 11, 2005
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