Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Tax Service Investigates Nidan Soki

The Federal Tax Service said it was investigating juice maker Nidan Soki over irregularities in its tax payments from 2004 to 2006, Interfax reported Friday.

Tax inspectors are investigating value-added tax payments made by Nidan, the country's third-largest juice maker, for ingredients purchased to produce children's food products, a spokesman for the service said.

British private equity group Lion Capital agreed in early August to purchase Nidan in the first leveraged buyout deal in Russia.

Tax service representatives said Nidan had purchased its supplies from temporarily existing firms, so-called "one-day" companies, thereby allowing it to reduce its VAT outlays from 18 percent to 10 percent.

"These products, bought from these one-day companies, which have neither production nor storage facilities, may not meet required standards," a tax service official said, Interfax reported.

Nidan general director Andrei Yankovsky confirmed that the tax service was carrying out a scheduled audit but said Nidan had received no details of its findings, Interfax reported. "The absence of any results from the audit rules out the possibility of any demands from the tax service," Yankovsky said.

The tax service spokesman said the incident was not isolated. "This situation applies to other manufacturers who apply a VAT rate of 10 percent," he said, Interfax reported.