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17 Oct, 2008 10:29

Court rules Russian tax claims against British Council invalid

A Moscow court has ruled that most of the charges brought against the British Council by Russian tax authorities were invalid.

It brings to an end a row stretching back to January 2008, when Russia’s Federal Tax Service billed the British Council for extra taxes from 2004 to 2006.

The British Council paid out the required amount but, judging the claims illegal, appealed against them in court in May 2008.

According to the representatives of the British Council, the organisation considered the case to be within the framework of their routine relations with the tax service.

Earlier the British media, referring to the employees of the British Council in Moscow, called the tax claims “disproportionate”.

Being a non-profit organisation under the auspices of Britain’s Foreign Office, the British Council nevertheless provides a number of paid services. The profits are used to finance its own activities.

The British Council’s press office said that it was satisfied with the court’s decision, though the details of the case are complicated and are still being discussed with lawyers.

It said it hopes progress will be made with talks over signing an agreement with the Russian authorities on cultural centres, which would enable joint projects to be developed with partners in Russia.

In January 2008 regional offices of the British Council in Yekaterinburg and St. Petersburg were shut down on the grounds that the organisation did not have the necessary legal status for operations on the territory of Russia.

The Russian Foreign Ministry made it clear that this was a response to steps by the British side in summer 2007. Back then, several Russian diplomats were expelled from London and a series of joint projects were frozen.

The British authorities blamed the expulsion on Russia’s refusal to extradite Andrey Lugovoy, suspected of murdering former security officer Aleksandr Litvinenko.

Russia’s constitution forbids the extradition of its citizens to third countries, although British Foreign Secretary David Miliband demanded this was amended.

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