News Outdoor, News Corp’s outdoor billboard business in Russia, has been hit with a $31m claim from Russia’s Federal Tax Service. The bill is very much disputed by News Corp.


According to Mosnews, News Outdoor allegedly engaged in activities other than outdoor advertising in 2006, and therefore had no right to claim tax benefits available to such advertisers. As a result, Federal Tax Service says that News Outdoor now owes the tax authorities 247 million roubles in income tax, and 679 million roubles in VAT, together making almost 14% of News Outdoor’s turnover in 2007-2008.

News Outdoor is reportedly going to file an appeal, and says it can prove that its Russian business was working within the law. However, it is somewhat stymied because Russia’s Interior Ministry is still holding onto documents seized in a complaint against the Murdoch-owned company. Last September News Outdoor’s Russian offices were raided by investigators from the prosecutor general’s office and accused of receiving illegal discounts on Moscow billboard advertising from 2002 to 2007, says Mosnews. The claim was later rejected by a Moscow court.

Rupert Murdoch is on record as saying he was concerned about further investments in Russia.

© Rapid TV News 2009