Russia expropriates and Western companies pay taxes: how international business finances the war – KSE research
6 March 13:51
Total losses of international business in Russia since the beginning of the full-scale Russian invasion have exceeded $170 billion. This is evidenced by the study “Assessment of direct losses of foreign companies in Russia: financial Impact, Market Consequences and Strategic Adjustments” by the Kyiv School of Economics (KSE), Komersant ukrainskyi reports
The main share of these losses is made up of asset write-offs, which exceeded $167 billion.
“Of these, more than $57 billion is attributable to companies whose assets were confiscated by the Russian authorities, transferred to local structures or state institutions, although their market value before expropriation was estimated at about $74 billion,”
– the KSE Institute notes.
In addition, the companies were forced to pay at least $3 billion in the so-called “exit tax,” which became a prerequisite for the sale of assets. In 2023, this tax increased significantly, increasing financial pressure on international businesses.
Companies from the following countries suffered the largest losses:
- USA ($46 billion);
- Germany ($44.5 billion);
- United Kingdom ($35.1 billion);
- France ($12.1 billion);
- Austria ($6.7 billion);
- Finland ($5.1 billion).
The energy sector suffered significant financial losses, with asset write-downs of British Petroleum, ExxonMobil, Fortum, TotalEnergies, and Uniper exceeding $60 billion. In the automotive industry, Renault lost $2.4 billion, while Volkswagen and Nissan also suffered serious financial losses. In the banking sector, Société Générale lost $3.3 billion, while UniCredit and Raiffeisen Bank faced large-scale lawsuits and forced write-offs.
The most significant losses of private business in Russia:
- british Petroleum’s (BP) withdrawal from Rosneft, which cost the company $25.5 billion;
- nationalization of the assets of German energy giants Uniper ($22 billion) and Fortum ($4.07 billion);
- write-off of assets of ExxonMobil ($4 billion) and Renault ($2.4 billion);
- société Générale’s forced sale of its Russian business for $3.3 billion.
“The sale of assets of international companies in Russia often took place at a significant discount – up to 90-100% below market value. The Kremlin and related business groups benefited from this situation by buying out the assets of international corporations for virtually nothing,”
– the KSE Institute emphasizes.
In addition to economic pressure, Moscow used mechanisms of forced seizure of assets.
“At least 30 companies have become victims of forced asset seizures, including: Carlsberg, Danone, Fortum, Wintershall Dea, Uniper and ExxonMobil,”
– says the KSE Institute report.
Consumer goods companies also suffered significant losses.
“McDonald’s, Nestlé, Unilever, Danone, and Carlsberg were forced to either leave the market or sell their assets for nothing,”
– the KSE Institute notes.
In total, as of early March 2025, 481 companies have completely left the Russian market. Another 1,357 businesses have reduced their operations or are in the process of leaving. At the same time, more than 2,260 international companies continue to operate in Russia without significant changes, earning profits and paying taxes to the budget of the aggressor state.
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How much tax does foreign business pay in Russia?
Since the full-scale Russian invasion of Ukraine in February 2022, international companies that continue to operate in Russia have paid significant amounts of taxes to the Russian budget. According to a study by the KSE Institute, in 2023 alone, the largest international corporations and banks paid about $1.78 billion in income tax. Among them are Raiffeisen Bank ($491 million), Chery Automobile ($222 million), Philip Morris ($220 million), Japan Tobacco International ($182 million), UniCredit Bank ($154 million), and Pepsi ($135 million).
In total, according to KSE Institute, foreign companies pay about $20 billion in taxes to the Russian budget annually. This amount remains significant despite the decline in the number of foreign companies in the country due to increased tax pressure and higher tax rates.
These tax revenues support the Russian economy, including the financing of military spending. It is known that Russia’s military budget in 2025 will amount to 175.5 billion dollars. THE US MILITARY BUDGET IS ESTIMATED AT $175.5 BILLION.
