• Register
Return to: Home > News > Tax > PwC Russia cleared in tax scandal

PwC Russia cleared in tax scandal

A Russian court has overturned charges PricewaterhouseCoopers Russia (PwC) was involved in the tax evasion scheme of a failed audit client. This month, the Moscow Region Federal Arbitrazh Court reversed an earlier First Instance and Appellation Courts ruling brought against the firm by Russian tax authorities. The case has now been terminated.

Tax authorities were seeking $600,000, which amounts to the audit fees PwC collected for the 2002 audit of former oil company Yukos. The tax collector said the firm should have been aware of and alerted authorities about Yukos’s tax affairs, which were determined to be illegal by a Russian court.

PwC appealed the earlier ruling and said it was pleased with the latest outcome.

“The court has made the correct ruling in this case, particularly given that Yukos no longer exists. This is good news for PwC, as well as for the Russian and international business communities.

“As always, we continue to focus our energy on growing and developing our business in Russia,” the firm said in the statement.

Yukos was created in 1993 during a period of privatisation of state oil assets. It became one of the world’s largest private oil companies and was responsible for about 2 percent of global oil production at its peak.

In August 2006, the company was declared bankrupt by a Russian court and was liquidated in October 2007.

Russian tax authorities claimed PwC issued two different audit opinions in 2002 – one for investors and one for Yukos management, often referred to as an internal control report.

The authorities alleged the difference in opinion proved that PwC was in collusion with the Yukos management and helped the company evade tax payments.

PwC previously said that issuing different opinions to the two groups was in line with Russian regulations.

The Big Four firm reported fee income of RUB7 billion ($264 million) in the year ended 30 June 2008.

Nicholas Moody

Top Content

    Brazil: regulation and technology form basis for recovery

    Opportunities in the capital markets and the ever-growing influence of technology are expected to have a significant impact on the Brazilian accounting profession over the next 12 months, writes Paul Golden.

    read more

    Mentoring support and the opportunity to delegate

    Jon Lisby will be known to many from his former role as CEO of Kreston International. Here, he explains the background to his new venture, Global Alliance Advisory Services (GAAS), and how he aims to offer support to alliance CEOs.

    read more

    Global by name, global by nature

    Stephen Heathcote became chief executive officer of PrimeGlobal on 1 June 2019. Robin Amlôt met him to discuss the various new challenges that he has taken on, and his ambitions for the association.

    read more

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.