Russia's tax service to check retailers, developers

MOSCOW, March 7 (Reuters) - Russia's Federal Tax Service will target retailers and real estate developers this year as it seeks to boost tax returns from the booming industries, it said on Friday.

"Despite growth in imports and a general boom in construction of hypermarkets, big trade centres and the development of retail chains, tax returns from the trade industry decreased in 2007," the service said in a statement.

Officials have previously accused retailers of using illegal import schemes with the aim of reducing taxes, but few have been caught. Last year, prosecutors launched a probe into Russia's largest mobile phone and accessories retailer, Euroset, on suspicion of smuggling.

The service's comments come days after it hit Russia's largest home electronics retailer Eldorado with back tax claims of up to $624 million, which could force the company to sell some assets.

The first sign of the service's stance was the arrest earlier this year of Vladimir Nekrasov, owner of Russia's top perfume and cosmetics retailer Arbat Prestige on suspicion of tax evasion.

Since the bankruptcy of oil major YUKOS in 2006, dozens of companies have received back tax claims, but unlike YUKOS most have managed to escape relatively unscathed by challenging claims in court, managing to reduce them substantially.

Russia's retail and real estate sectors are booming on the back of rising consumption.

Dozens of companies working in consumer markets have floated their shares in the past few years, including home electronics and white goods retailer M.video (MVID.MM: Quote, Profile, Research) MVID.RTS, discount retail chain Dixy (DIXY.MM: Quote, Profile, Research) and property developers PIK Group (PKGPq.L: Quote, Profile, Research) and RTM (RTMC.MM: Quote, Profile, Research). Russia's listed food retailers are X5 Retail Group (PJPq.L: Quote, Profile, Research), Magnit (MGNT.MM: Quote, Profile, Research), Dixy (DIXY.MM: Quote, Profile, Research) and Seventh Continent (SCON.MM: Quote, Profile, Research). Analysts say the food retail market increased 32 percent in 2007 to $191 million.

The service also said it would check wholesale trade enterprises and manufacturers. (Reporting by Darya Korsunskaya; Writing by Maria Kiselyova; Editing by David Holmes)