VimpelCom Found To Owe $10.2M In Taxes, $7.4M In Fines"

NEW YORK (Dow Jones)--Russia's Vimpel Communications (VIP) said tax inspectors doing a final review of its 2001 Russian tax filing decided that the company owes only an additional $10.2 million in taxes and $7.4 million in fines and penalties, lower than a preliminary estimate.

In a press release Thursday, the mobile phone operator said the final decision reflects a significant reduction from the roughly $157 million in additional taxes, fines and penalties listed in the preliminary action of the tax inspectorate for 2001.

The company also said the the tax authorities accepted the company's objections regarding the KB Impuls agency relationship and withdrew the related claimed amount.

The company's shares rose to $35.90, up $2.13, or 6.2% on volume of 1.7 million shares. Average daily volume is 1.7 million.

The claim for back tax was related to VimpelCom's subsidiary KB Impuls. Earlier this month a Vimpelcom spokesman told the Wall Street Journal that tax authorities had claimed that the company was trying to minimize profit tax by redistributing revenue between Vimpelcom and KB Impuls.

In the Thursday release, VimpelCom said a significant portion of the tax claim exclusive of fines and penalties arose from claims by Russian authorities that value added tax offsets were made incorrectly. The company plans to pay the value added taxes for 2001 and make offsets of these amounts in later tax years.

VimpelCom said it does not agree with the claims of the tax authorities, but plans to pay the claimed amount and is considering whether to appeal some or all provisions of this final decision for 2001.

Earlier in December, VimpelCom's shares fell sharply after an announcement that it had received a preliminary claim for $157 million in back taxes from Russian authorities. The back-tax claims, likened by some to the action taken against oil company 0A0 Yukos, also fueled fears of further action by Russian authorities against large companies.

In the Thursday release VimpelCom's Chief Executive Alexander Izosimov said the overall process between the tax authorities and the company had been "constructive."

-Anjali Cordeiro; Dow Jones Newswires; 201-938-5400; AskNewswires@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 30th December 2004