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. Last Updated: 07/27/2016

04/20/1994

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U.S. Group Cautions Firms on Investment

Unsatisfied with government assurances that a 23-percent value-added tax does not apply to foreign investment, the American Chamber of Commerce said Tuesday that it had recommended its members reconsider direct loans to Russian companies. Chamber officials said confusion over a presidential tax decree has reduced foreign investment in Russia and hundreds of millions of dollars is at risk unless the regulation is clarified quickly. ""Much needed financing from foreign sources to Russian legal entities has been stopped!"" the chamber wrote in a letter delivered to the government last week and made available to journalists Tuesday. The statement was among the strongest yet since foreign investors learned earlier this month that loans by their companies to Russian entities were being subjected to a 23 percent VAT. Top Russian officials have said publicly in the past week that the loans would not be taxed.

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