Oil giant seeks repayment of 'tax paid in error'
Tuesday December 15 2009
An Irish subsidiary of Russian oil giant Rosneft is trying to recoup tax handed over to the Revenue Commissioners that the company says it paid in error, accounts for the business reveal.
Rosneft International, which is one of two Ireland-based arms of Russia's largest oil and gas company, was hit for tax and penalties amounting to just over $5.5m (€3.7m) in Russia after what it described as "recognition of operating activities derived through the Russian Federation and the company's representative office in Moscow".
It added that the tax settlement related to the years 2006 to 2008, but that efforts will be made to have tax paid in Ireland during the period returned.
"The directors anticipate the recovery of tax paid in Ireland in respect of prior periods, but have not recognised a credit for this refund as recovery is currently uncertain," the accounts note.
Rosneft International paid a total of almost $9m (€6.1m) in tax here and in Russia during 2008, up from $5.2m in 2007. Last year it paid nearly $4.3m in corporation tax in Ireland, while it also stumped up an additional Russian tax charge of $1.2m and recorded negative "adjustments to its tax charge in respect of previous periods" of $2.1m.
Facilitate
Rosneft International is used by the parent company to facilitate investment activity.
That typically involves providing finance to Rosneft's various projects, while the Irish arm is also holding company for the firm's other operations, including oil trading and the provision of air transportation services for Rosneft executives.
From 2006 to the end of 2008, Rosneft International has paid a total of almost $9.8m (€6.7m) in corporation tax in Ireland at the 25pc rate applicable to non-trading income.
The company incurred an operating loss of $5.6m last year as its operating expenses soared from $1.5m to $6m. Its pre-tax profit was $17.1m after it received interest income of $28.3m. Its fixed assets are listed as nearly $206m of investments.
The firm says it employs just one person in an administration role, and the remuneration for 2008 was $466,000, down from $603,000 in 2007.
Its directors include Anton Kozhinov, who is Rosneft's chief financial officer.
- John Mulligan
Irish Independent
