Russian court overturns tax claims against British Council

October 17th, 2008 - 7:03 pm ICT by IANS  

Moscow, Oct 17 (RIA Novosti) An arbitration court here Friday ruled that the majority of tax claims filed against the British Council in Russia for 2004-2006 were unlawful.The ruling came in response to a lawsuit filed by the British embassy’s cultural arm against claims made by the tax authorities Jan 21. Both court officials and the parties declined to comment on the court decision and the size of the tax claims.

Russian authorities ordered the closure of the organization’s two remaining regional branches in January, citing legal irregularities over their status and non-payment of taxes.

The British Council’s Moscow office called the tax claims filed in May “punitive and disproportionate” and paid only part of the sum demanded, and also filed an appeal with the arbitration court.

Tax authorities then threatened to send in bailiffs to seize British Council property, including books, office equipment and furniture, from the Moscow office if the tax arrears remained unpaid.

The Russian foreign ministry earlier said the British Council, set up in Moscow in the early 1990s, opened 14 regional offices without ensuring their legal status and engaged in commercial activities without paying taxes.

The tax dispute coincided with the diplomatic row between the two countries over Moscow’s refusal to extradite Andrei Lugovoi, the prime suspect in the fatal poisoning of Russian intelligence defector and British national Alexander Litvinenko in London in 2006.

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