Austria’s Raiffeisen Bank International, which owns Russia’s Raiffeisenbank, has estimated its expenses for excess profits tax in Russia at up to 100 million euros. This is stated in the group’s interim report for the first half of 2023.
The bank noted that some details of the excess profits tax are still unclear and subject to interpretation. What is known for sure is that the prime rate will be 10% and for those companies that will avail of the advance security charge, it will be 5%.
“RBI expects the additional tax to be up to €100 million (at a 10% tax rate) or €50 million (if voluntary payment mechanisms are approved),” the bank wrote in the report.
Russian authorities have obliged large companies to pay tax on excess profits earned in 2022 due to the growing budget deficit amid the war in Ukraine. Deputy Prime Minister Andrei Belousov assured that business itself had asked for a “war tax,” but Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs (RSPP), denied the claim.
At least part of the additional funds received from business, the government intends to spend on expenses related to the war in Ukraine, Bloomberg wrote earlier, citing sources familiar with the situation. At the same time, oil and gas, coal and other raw materials companies were exempted from the tax. All others will have to pay it if the average value of their profits in 2021-2022 exceeded 1 billion rubles. In total, the authorities expect to receive 300 billion rubles from big business.
As “Novaya Gazeta Europe” calculated, Western companies that have not left Russia will pay a total of up to Rb 70bn in the form of “war tax”. Oil and gas companies Total and British Petroleum, as well as Raiffeisenbank, will have to pay the most.
At the same time, the Russian authorities did not rule out that the excess profits tax may become permanent if the federal budget deficit continues to grow.
Raiffeisen Bank earlier said it planned to finalize the spin-off of its Russian subsidiary into a separate company by October. But Reuters wrote, citing sources, that the company may postpone its exit from the Russian market as officials in Austria are resisting pressure to do so, hoping the war in Ukraine will soon end.