Nothing personal – it’s business: U.S. Companies pay over $1 billion in taxes to Russia

11:13 18.01.2025 •

U.S. companies that have continued to do business in Russia have contributed more than $1 billion in tax revenue to Kremlin, Newsweek has learned.

American firms in Russia paid the country $1.2 billion in profit taxes in 2023. This tax contribution makes the U.S. the largest contributor of foreign profit taxes to Russia.

Research from the Yale School of Management’s Chief Executive Leadership Institute (CELI) estimates that 123 large U.S. companies continue doing business with Russia, with various levels of involvement.

According to the new research, the 10 companies that paid the most profit taxes to Russia in 2023 were tobacco company Philip Morris International ($220 million), beverage corporation PepsiCo ($135 million), confectionary company Mars ($99 million), health and hygiene consumer goods firm Procter & Gamble ($67 million), confectionary company Mondelez ($62 million), investment bank Citigroup ($53 million), agricultural company Cargill ($50 million), pharmaceutical firm Johnson & Johnson ($42 million), independent soft-drink bottler Coca-Cola Hellenic ($34 million) and oilfield service company Weatherford ($32 million).

Philip Morris International (PMI) said it suspended planned investments and scaled down its manufacturing operations in Russia when war broke out. But in February 2023, the company’s CEO, Jacek Olzak, told the Financial Times that he was unwilling to sell the business on Kremlin terms because of the financial hit it would entail.

Mondelez has remained in Russia, arguing that investors did not “morally care” whether companies continued to do business there.

Coca-Cola stopped selling its drinks to Russia but the bottler in the region, Coca-Cola Hellenic, sells a product called Dobry Cola via Multon Partners. Coca-Cola has a 21 percent stake in Coca-Cola Hellenic. Coca-Cola reportedly applied to re-register its trademarks in Russia in April 2024.

Meanwhile, PepsiCo, Mars, Procter & Gamble (P&G), Cargill and Weatherford scaled back their business but continued to produce goods and run operations it deemed essential, according to the companies.

American companies’ $1.2 billion tax bill is up from the $915.7 million they collectively paid in 2021. This is despite a decline in combined revenues from $50 billion in 2021 to $30.5 billion in 2023.

Mark Temnycky, a non-resident fellow at the Atlantic Council think tank’s Eurasia Center, called on Congress to “impose stiffer financial penalties” on U.S. companies that remain in Russia, arguing that they “boost the Russian economy,” enable Moscow to purchase weapons and military equipment and undermine “the impact of international sanctions.”

Despite pressure, leaving Russia is not without its problems. The Russian government charges companies that leave the country a 15 percent exit tax and are forced to sell their assets at a 50 percent discount. The exit tax generated $385 million for the Kremlin between January and March 2024.

A further financial headache for firms who wish to exit the country is coming. In 2025, the corporate profit tax rate will increase from 20 percent to 25 percent, according to the Russian Tax Code.

Dani Belo, an assistant professor who teaches international relations at Webster University in Missouri, argued that U.S. businesses’ relationship with Russia was “normal.”

“This dual reality of fighting with an adversary but also doing business with them is a normal characteristic of international relations,” he told Newsweek. “Considering how interconnected our world has become, ultimately this trade in the midst of conflict is not a phenomenon which should surprise us.”

 

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