JURIST - Paper Chase: Russia arbitration court voids most tax claims against British Council

[JURIST] Moscow's Ninth Arbitration Court of Appeals on Thursday declared void [Interfax report] most of the Russian government's tax claims against the British Council [official website], the British government's cultural relations arm, relating to the organization’s in-country operations in 2004-2006. The British Council filed suit last May seeking to void tax claims of over 200 million rubles made by the Russian government in late 2006. In October, the Moscow Arbitration Court ruled [JURIST report] to invalidate the majority of those claims. Thursday's appellate arbitration court decision upheld the judgment for the British Council, qualifying 130 million rubles of the taxes as void.

The tax claims were made in the midst of strained relations between Russia and the UK over the demanded extradition of Andrei Lugovoy [JURIST news archive], suspected by UK intelligence services of poisoning former KGB agent and British citizen Alexander Litvinenko [JURIST news archive]. Following the filing of the tax claims, the Russian government issued a directive to shut down [BBC report] the 14 Russian regional offices [official website] of the British Council in December 2007. The British Council unilaterally resumed its Russian operations in January 2008 in defiance of what it considered to be the "illegal" [JURIST reports] shutdown order and filed a lawsuit to dispute the taxation claims, though the disputed claims were paid in the interim.

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