German companies still operating in Russia have paid more than €1.72 billion in taxes to Moscow since the start of the Ukraine war, raising concerns that the money may be indirectly supporting Russia’s military efforts.
A new report shows that over half of German firms that were active in Russia before the 2022 invasion continue to do business there. These companies include manufacturers and consumer-goods producers, many of which generate large revenues in the Russian market.
In 2024 alone, German companies paid around €513 million in profit taxes to Russian authorities. Analysts say these funds “help sustain Russia’s war economy,” as tax income contributes to government spending, including defence and security budgets.
Criticism and Pressure
Human-rights and transparency groups have condemned the payments, saying western companies still operating in Russia are undermining sanctions and indirectly funding the war.
“Taxes paid by foreign businesses in Russia assist the Kremlin’s war machine,” one campaign group said, calling on international companies to exit the Russian market immediately.
Some critics argue that continued western operations in Russia weaken the economic pressure meant to limit Moscow’s ability to finance the conflict.
Why Companies Haven’t Left
German firms say exiting Russia has become legally and financially difficult.
The Russian government requires foreign companies to sell their assets at steep discounts and pay additional exit taxes.
Some companies also argue that leaving could hurt their local employees and supply chains. Others say selling operations to Russian buyers would hand even more control — and profit — to the Russian state.
Growing Political Focus
The issue has sparked debate in Germany and across Europe. Lawmakers are now calling for clearer reporting and stronger policies to discourage western firms from supporting Russia’s economy.
Meanwhile, Ukraine and allied nations continue urging businesses to withdraw fully, warning that staying in Russia risks financial and reputational damage.
