E&Y faces $US16.5m tax claim from Russia

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

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
Further reading:

story in Moscow Times

Related reading