German Firms Paid €1.72 Billion in Taxes to Russia Amid War

URGENT UPDATE: German companies have paid nearly €1.72 billion in taxes to Russia since the invasion of Ukraine, raising alarms about their role in funding the ongoing war. Despite significant pressure, more than half of German firms that operated in Russia before the full-scale conflict remain active there today, according to a shocking new report.

As of now, approximately 250 German companies continue their operations in Russia, legally generating tax revenue that critics assert bolsters the Kremlin’s military efforts. Notable firms like cheese manufacturer Hochland and construction materials giant Knauf are among those still active, leading to mounting calls for immediate withdrawal.

“The taxes paid by these companies support Russia’s war economy,” stated Nezir Sinani, director of B4Ukraine, a coalition working to halt financial resources that fuel the conflict. He emphasizes that staying in Russia implicates these companies directly in the war efforts. “This is a loophole that must be closed,” he asserted.

Data from the Kyiv School of Economics (KSE) reveals that international firms operating in Russia contributed over €17.2 billion in taxes to the Russian state in 2024 alone. Since February 24, 2022, the total has exceeded €51.8 billion, a staggering sum that could fund military operations, including around 10,000 attack drones targeting Ukrainians.

In stark contrast, German companies rank second only to U.S. firms in tax contributions to the Kremlin. In 2024, U.S. businesses paid €1 billion while German companies contributed approximately €513.5 million. The KSE estimates that from 2022 to 2024, German firms averaged €1.72 billion annually in taxes, a figure that translates into ammunition for missiles devastating Ukrainian cities.

In response to inquiries about their continued operations, Hochland stated, “(We have) a responsibility toward our roughly 1,800 employees and their families.” The company, which operates three plants in Russia, claims that withdrawing would only benefit the Russian state further.

However, Hochland’s ongoing presence is met with criticism, as the company continues to operate despite acknowledging a “significant drop in profitability.” The firm expresses hope for a return to “the Western community of values,” yet faces backlash for contributing to the war effort.

The situation is further complicated by the increasing costs associated with exiting the Russian market. In a recent announcement, Russian Finance Minister Anton Siluanov revealed that the tax on business sales has surged from 15% to 35%, making withdrawal financially burdensome for foreign companies.

As of early July, only 503 international companies, or 12%, have fully exited Russia. Meanwhile, over 54.8% of companies remain active, with German firms making up 55% of those still operating since before the invasion.

Critics like Sinani argue that the involvement of companies like Knauf extends beyond mere tax payments. The firm has been accused of facilitating Russia’s reconstruction efforts in war-torn areas, a claim Knauf denies. “We categorically reject all allegations that we are directly or indirectly supporting this war,” the company stated.

With the EU imposing extensive sanctions on Russia, the continued presence of these companies raises questions about the effectiveness of these measures. Sinani asserts that the sanctions are less impactful when firms contribute to the Russian economy through taxes and operational activities.

“Eleven years after Russia’s aggression against Ukraine began, we see very little progress in withdrawing companies from a market directly tied to financing Russia’s war machine,” he emphasized. Sinani insists that a complete corporate withdrawal is essential, stating, “Drop the keys and leave immediately.”

The German government and its citizens have provided Ukraine with €44 billion in aid, yet the ongoing tax contributions from German companies threaten to undermine this support. As the conflict continues, the question remains: will these firms take decisive action to cease their operations in Russia, or will they remain complicit in the financial machinery driving the war?

Stay tuned for updates as this situation evolves.