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British Council Sees Russian Tax Bill Reinstated

by Tatiana Smolenskaya, Tax-News.com, Moscow

30 December 2008


It has been reported that a Moscow appeal court has partially reinstated a tax bill being imposed by the Russian authorities on non-profit cultural organisation, the British Council.

The Russian authorities closed down British Council branch operations in the country following a deterioration of relations in the wake of the poisoning of Alexander Litvinenko, after Russia refused to extradite the main suspect in the case to Britain for questioning as requested.

The government of Russia subsequently levelled accusations of spying against British Council representatives, in addition to accusing the organisation of failing to fulfil its tax obligations.

In October 2008, Moscow’s commercial court ruled that the majority of tax claims filed against the British Council for 2004-2006 were unlawful.

The British Council received a tax bill in Moscow in May 2008 in respect of British Council activity in 2004-06, which was the result of a tax inspection that took place during 2007. However, it disputed the claim and has always argued that it is in full compliance with the Russian tax code.

The recent ruling by the appeal court has revoked the earlier decision, supposedly on a technicality.

A new hearing is set to take place in late January.


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