The Russian tax authorities are demanding more than $US16.5m (₤8.3m) in back taxes from Ernst & Young (E&Y), accusing the firm of funneling undeclared profits from its Russian operations to its Cyprus-based parent company in 2004.
Alexander Ivlev, a Ernst & Young partner, said the firm had filed a lawsuit on Wednesday contesting the claim but he would not comment until the case was over, Moscow Times reports, citing business publication Kommersant.
The tax authorities are seeking 390m rubles, claiming 151.26m in unpaid taxes on revenue; 116.6m rubles in value-added tax; and128m rubles in fines.
E&Y recorded 10.5m rubles in revenue in 2004, but the tax authorities
claim the amount fell short by 630.3m rubles. The firm says the disputed amount
represents payments for services provided by its Cyprus-registered parent
company.
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