March 2022: an organized tour group drives into the Russian settlement of Barentsburg on Svalbard. Previously, the tour group would have entered the hotel, had a bite to eat in the cafe and bought some souvenirs. This time they content themselves with walking along the street for a few minutes before driving on. This is how it has been in Barentsburg ever since last winter. According to Trust Arktikugol, the state-owned Russian mining company on Svalbard, income from tourism and coal production has plummeted since Russia went to war against Ukraine on 24 February. Now Trust Arktikugol is demanding to avoid paying taxes because of the failing income. This is revealed in a letter that was sent to the Norwegian authorities in mid-November. The company also operates the Grumant Arctic Travel Company, which organizes the Russian tourist activity in Barentsburg and Pyramiden. Director Ildar Neverov, however, does not wish to comment on the matter to news. The reason is that this concerns the company’s commercial activity, he writes in an e-mail to news. Scooter tourists on their way through Barentsburg in March 2022. Photo: Rune Nordgård Andreassen / news – Conscientious taxpayer In the letter, Trust Arktikugol points out that the company is a conscientious taxpayer in Svalbard, and lists how much has been paid in taxes in recent years. In 2021, for example, the tax requirement was almost NOK 4.5 million. Only part of the amount has so far been paid, but the company promises that the rest will be paid in the near future. At the same time, Trust Arktikugol is now demanding tax exemption or tax relief for 2022 and 2023. The company refers to the Tax Payments Act section 15, which deals with payment postponement and payment reduction “for the sake of the debtor”. According to the letter, the company’s ability to pay has been weakened as a result of the economic sanctions that Norway and other countries have introduced against Russia as a result of the war in Ukraine. For example, the export of coal from Barentsburg has stopped. Boycott Another element is the boycott implemented by organized tourism in Svalbard. Previously, the tourism companies in Longyearbyen bought a number of services in Barentsburg and Pyramiden, such as guiding, bus transport and hospitality. This is not the case now. Trust Arktikugol therefore asks the Governor to contact the Norwegian Ministry of Finance, and ensure that the company does not have to pay tax this year and next year. At the very least, Trust Arktikugol should be granted a significant reduction, the letter states. Russky Dom, the Longyearby branch of the Grumant Arctic Travel Company. Photo: Rune Nordgård Andreassen / news news has been in contact with the Ministry of Finance, which confirms having received the inquiry from Trust Arktikugol. Beyond that, the ministry will not comment on the case, as long as it is being processed, the press service informs. – Will not go ahead with the claim, believes tax expert Eivind Furuseth, associate professor of jurisprudence at BI. He believes the Russians will not gain traction for their demand for less tax, even though there are sections in the Tax Payments Act that deal with this very thing. – A company can apply for payment deferral, but then it must not violate public morals. If the Norwegian authorities reduce or postpone the tax for Russian companies, it will mean greater profits, which in turn can help to finance the war machine in Ukraine. I don’t think the Norwegian tax authorities will agree to that. It will also be offensive to you and me as ordinary taxpayers, says Furuseth. Don’t feel any responsibility It was in mid-March that the Svalbard tourism council urged its member companies not to leave money in either Barentsburg or Pyramiden. But with a few exceptions, the call has been heeded. In the autumn, they also took the step of excluding Grumant Arctic Travel Company from the council. The company was also no longer allowed to advertise its activities on the website of Visit Svalbard. Now the Russians’ demands for tax relief or exemption, as a result of the boycott and sanctions, are shrugged off. – We do not feel any responsibility towards state-owned, Russian companies, says chairman of the Svalbard tourism council, Ronny Strømnes.
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The Russian mining company in Svalbard demands that Norway grant tax exemptions due to the sanctions – news Troms and Finnmark
