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14 Sep 2023

Thomas Gösta Svensson,
Mathias Glistrup, Danwatch

Russia: Rockwool paid millions in taxes in 2022, now obliged to pay tax on excessive revenue allegedly earmarked for war in Ukraine

[Translation prepared by Business & Human Rights Resource Centre]

Rockwool's secret: Paid over 130 million to Putin's war chest, 14 September 2023

Since last February, Russian President Vladimir Putin has transferred billions of rubles from Russia's treasury to the military to finance the bloody war of aggression against Ukraine.

And to that extent, Danish Rockwool and the group's four factories in Russia have also contributed to that fund in 2022...

Now Danwatch and Ekstra Bladet can reveal, on the basis of official documents from the Russian tax authorities, that last year alone Rockwool paid 132.6 million Danish kroner in tax in Russia, if you calculate the average value of Russian rubles for 2022...

"The figure was obtained from the Russian authorities, so Rockwool cannot run away from it," says Andrii Onopriienko, deputy development director at the Institute for Political Research at the Kyiv School of Economics in Ukraine, who has many years of experience from several large companies and the banking sector in the West and in Russia...

Foreign companies' contributions to Putin's coffers have met with sharp international condemnation, and the Ukrainian president, Volodymyr Zelensky, has previously spoken out in harsh terms about Western companies' Russian tax contributions:

“Companies that are on the market in the Russian Federation must leave it. If possible, they must leave it forever. The most important thing for us is not even that they leave the Russian market, but that they do not use their taxes in the Russian system to finance the weapons with which they kill us," he said during the Yale CEO Summit last year .

Danwatch and Ekstra Bladet have, among other things, asked Rockwool whether the company fears that they are indirectly helping to finance the war in Ukraine. Michael Zarin, communications manager at Rockwool, will not answer that, but writes, among other things:

"It is correct that the Russian subsidiary pays tax in Russia, just as every other Danish, international and local company does, and as we do in every country where we are present," he writes.

“It is still our opinion that the least bad option is to maintain the current passive ownership of the Russian subsidiaries. We are convinced that if we withdrew from Russia, our factories would be nationalized or taken over by a local player who would also be obliged to pay taxes”...

And Rockwool will soon pay even more in taxes. On August 4 this year, President Putin signed a new law on a one-off tax that all large companies with profits must pay.

The new tax has been dubbed "war tax" in several international media such as the Moscow Times and Bloomberg, because according to media sources, part of the income is earmarked for the war in Ukraine...