With money-laundering scandal over, Deutsche Bank’s Russian unit has backdated tax bill to sort out

By Andrei Skvarsky.

On top of having been at the centre of a money-laundering scandal that forced the parent company to pay large fines to British and US regulators in January, Deutsche Bank’s Russian subsidiary has received a 10bn-rouble ($174m) backdated tax bill from the Russian government.

According to Bloomberg and Russian business daily RBC, the Moscow-based subsidiary is suspected of using foreign currency swaps with a Deutsche unit in London to lower the base for income tax calculation.

“As part of an ongoing routine audit, Deutsche Bank is working with Russian tax authorities on matters relating to standard business operations that follow normal industry practice,” the German bank said in a statement in reference to the case.

RBC cited a senior banker as arguing that the Frankfurt-headquartered lender might pull out of Russia if it had to cough up the money wanted by the country’s tax service.

Deutsche Bank Russia’s reported net profit for 2016 was only around 2bn roubles. This and the $629m Deutsche paid in Britain and the United States in January in settling the money-laundering charges could make the bank’s business in Russia unsustainable, the banker explained.

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