The Ninth Commercial Court of Appeals has upheld the Moscow Commercial Court’s decision to charge IKEA Mos $15.7 million in additional taxes on Monday.

IKEA Mos had challenged the trial court’s March 22 judgment in favor of the Federal Tax Service’s resolution. In 2010, IKEA objected to the supplementary 1.06 billion ruble ($33.3 million) tax charge dated April 30 of that year.

The Moscow Arbitration Court partially upheld the lawsuit on December 14, 2010 and halved the tax claims to 500 million rubles ($15.7 million).

The dispute stemmed from the accrual of extra profit and property tax due to lessees renovating their premises in Mega trade centers. The tax inspectorate believes that all the renovation expenses incurred by lessees should be considered to be IKEA Mos profits, as the latter owns the building. However, Irina Johansson, the head of the company’s PR service, said that although lessees may revamp their premises, the areas must later be restored to their original design after the lease contracts are up.

IKEA operates 11 IKEA outlets and 13 Mega trade centers in Russia. The first IKEA store opened in Russia in 2000. The projected investments to commission Mega trade and entertainment complexes amount to $120-$300 million on average.

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