McDonald's Contests Tax Bill

McDonald's Russian unit is disputing a bill for 160 million rubles ($6.5 million) in unpaid taxes, Kommersant reported Tuesday.

Tax officials said McDonald's in 2003 and 2004 improperly wrote off the cost of products purchased from an unregistered company, Ivers Import, whose registration documents have been misplaced. McDonald's was not aware that the company was unregistered, according to court documents, the newspaper said.

The Federal Tax Service also said McDonald's improperly benefited from a reduced tax rate for the purchase of milk and meat products that did not have government quality-control certificates. McDonald's said its ingredients meet European standards, Kommersant reported, citing court documents.

Company spokeswman Nina Prosolova said it disputed the tax claims and declined to comment further before the court reaches a decision, Kommersant said. No one at McDonald's could be reached for comment Tuesday.

The tax service claims that McDonald's obtained meat and packaging materials from unreliable companies and applied value-added tax benefits to uncertified meat and dairy products. The tax service also said McDonald's bought packaging provided by East Alliance, which it said was also not registered.

In addition, the tax service found that reduced VAT of 10 percent was paid on milk shakes, ice cream and chicken nuggets were sold without health certification.

Bloomberg, MT