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German Firms Accused of Funding Russia’s War Through Billions in Tax Payments
German companies have paid nearly $2 billion (€1.72 billion) in taxes to Russia since the start of Moscow’s full-scale invasion of Ukraine, effectively bolstering the Kremlin’s war finances, according to a new report by the Kyiv School of Economics (KSE) in cooperation with B4Ukraine and the Squeezing Putin Initiative.
The report estimates that international companies operating in Russia paid at least $20 billion (€17.2 billion) in taxes to the Russian government in 2024 alone, with German businesses ranking among the largest contributors. Between 2022 and 2024, their total payments are believed to have reached around $2 billion annually.
More than half of the roughly 250 German firms that were active in Russia before the war remain in the country today, despite mounting criticism. While many, such as cheese maker Hochland and construction materials producer Knauf, are not violating EU sanctions, campaigners argue that their continued operations indirectly fund Russia’s war effort.
“Companies support Russia’s war economy through the taxes they pay,” said Nezir Sinani, director of B4Ukraine, a coalition of civil society groups pushing to block economic support for Moscow. “By remaining in Russia, they are complicit in its war of aggression.”
KSE’s data suggests that the total tax revenue paid by foreign firms to Russia since February 2022 exceeds $60 billion (€51.8 billion) — equivalent to almost half of Russia’s 2025 defense budget.
Despite the growing backlash, many German firms say leaving Russia is not a simple decision. Hochland, which operates three plants in Russia, told Euronews that it remains committed to its 1,800 local employees and “strongly condemns” the war, but warned that withdrawal could ultimately benefit the Russian state.
Knauf, one of Russia’s largest foreign construction suppliers, has also faced criticism after reports linked its materials to reconstruction projects in occupied Mariupol. The company denied any cooperation with Russian authorities or military-linked contractors, saying it sells only to independent retailers. Knauf said it plans to leave the Russian market but that earlier negotiations with a buyer had failed.
Exiting Russia has become increasingly costly. Moscow raised taxes on foreign asset sales from 15% to 35% and increased mandatory discounts to 60%, with major sales now requiring President Vladimir Putin’s personal approval.
Sinani argues that such hurdles should not deter companies from leaving. “The number of German firms still operating in Russia is unjustifiably high,” he said. “The cost of staying is measured not in euros, but in human lives. Companies should hand over the keys and leave immediately.”
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