Russian Oriflame suspected of tax evasion of RUB 3.5 bln

Russian law enforcement agencies suspect a subsidiary of Swedish cosmetics company Oriflame in Moscow of tax evasion in the amount of RUB 3.5 bln, the Russian business daily Kommersant wrote on Aug. 5.

“The audit of the Russian subsidiary of Oriflame showed that the company tunneled out RUB 3.5 bn under the guise of royalties for the trademark to the head office of the company in the Netherlands, as well as allegedly overstated the payment of advertising services of subcontractors, thus evading taxes in Russia,” according to the media.

The company was audited by several law enforcement organs, including the Ministry of Interior, Federal Security Service, Federal Tax Service, Federal Customs Service, Federal Financial Monitoring Service and Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing.

Materials from the Federal Tax Office in Moscow served as a basis for a comprehensive inspection of the Oriflame’s subsidiary. The cosmetics company deliberately understated its incomes in order to minimize tax payments to the Russian budget, according to the tax office.

The tax office compared financial reports of the company with the reports submitted to the stock exchange, where the discrepancies were found, Kommersant wrote.

Photo courtesy of Fulvio314.