AkzoNobel paid around €16 million in profit tax to the Kremlin since Ukraine invasion

The Russian branch of the Dutch paint group AkzoNobel has grown since Russia invaded Ukraine in February 2022, even though the multinational publicly claims it has largely left Russia. In the past two years, AkzoNobel paid the equivalent of approximately 16 million euros in profit tax to the Kremlin, NRC reports based on the annual reports of AkzoNobel’s three Russian subsidiaries.

The turnover of the Russian subsidiaries grew by 8 percent last year after a 3 percent decline in 2022. Last year’s net profit amounted to over 37 million euros. The Russian subsidiaries are fully owned by the AkzoNobel parent company in Amsterdam, although they have not paid dividends since 2022.

The results contradict AkzoNobel’s official statement that it has ceased a “significant part” of its activities in Russia since the country invaded Ukraine. When presenting the annual figures in February, financial director Maarten de Vries said that the “business in Russia had been halved.”

An AkzoNobel spokesperson told NRC that the Russian activities have indeed been halved, but “the volumes of the remaining parts have increased against expectations.” The spokesperson added that companies are legally obligated to pay taxes in the countries where they operate. “The alternative, if a company does not do this, is that it could be nationalized by Russia.”

According to NRC, data from Russian customs show that the AkzoNobel subsidiaries in the country could grow because AkzoNobel continued to supply large quantities of raw materials for paint and coatings from abroad. Until the end of last year, the multinational sent almost 2 million kilograms of these raw materials to Russia from branches in Sweden, Vietnam, and Turkey.

AkzoNobel has stated since April 2022 that the Russian subsidiaries only operate “locally.”

The paint multinational is not the first to be criticized for continuing business in Russia while claiming otherwise. Heineken launched new products in the Russian market despite promises to leave, and Unilever received 200 million euros in royalties from its Russian subsidiary, contrary to its promises.