Court of Appeal dismisses tax claims against British Council

Yesterday the Court of Appeal quashed most of the tax claims filed by the Federal Tax Service against the British Council, the UK government's cultural arm in Russia.

The Ninth Arbitrazhniy Court revoked a lower court's decision and denounced claims by the tax authorities for 145 mln roubles (~2.8 mln pound sterling) of total 200 mln roubles (~3.8 mln pound sterling).

As relations between London and Moscow deteriorated over the past two years, the Russian government forced the closure of the Council's regional offices, saying they were not legal, while President Dmitry Medvedev described the organization as 'a nest of spies'.

Britain has always said that the Council's activities in Russia were fully legal.

The Russian Ministry of Foreign Affairs have declared that the court's decision will not help the British Council to restore its full activity in Russia.

January 30, 2009