A recent joint study by B4Ukraine and the Kiev School of Economics (KSE) revealed that American companies have paid the highest amount of taxes in Russia compared to firms from any other foreign country. The study found that American companies paid a total of $712 million in taxes to the Russian budget in the year 2022. This comes as a surprise, considering the ongoing tensions between the United States and Russia.
Data from the study also showed that 44% of US firms that were present in Russia at the start of Moscow’s military operation in Ukraine have continued to operate in the country. The second-largest tax contribution came from German companies, with a total of $402 million. Swiss companies followed closely behind, contributing $275 million, and Japan and the UK rounded out the top five.
Interestingly, businesses headquartered in the G7 and the European Union (EU) were the largest taxpayers in Russia, with 16 out of the top 20 contributors coming from these regions.
The study also looked at the overall revenue generated by foreign corporations in Russia, including those that left the country since February 2022. It found that these companies made more than $213.9 billion in revenue through their Russian businesses in 2022, with $14.1 billion in profits. In terms of taxes paid, foreign corporations contributed a total of $3.5 billion to the Russian budget.
The study further highlighted the industries that received the largest revenue from their businesses in Russia. Alcohol and tobacco producers, consumer goods manufacturers, and car makers were among the top earners.
It is worth noting that many global companies have been faced with the need to reassess their presence in the Russian market due to pressure from Ukraine-related Western sanctions. Despite this, only 8% of the approximately 3,000 foreign companies that were operating in Russia before February 2022 have finalized their exits from the country, according to the most recent data from KSE. Additionally, over half of the companies still operating in Russia have not announced any plans to divest.
The findings of this study shed light on the significant contributions American companies have made to the Russian economy through tax payments. It also highlights the resilience of foreign companies in the face of geopolitical tensions and the potential impact of economic sanctions. As global business dynamics continue to evolve, it remains to be seen how these findings will influence future investment and trade relationships between the United States and Russia.
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