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Court Backs British Council

A federal court on Tuesday threw out most of a multimillion-dollar tax claim against the British Council.

The Moscow District Arbitration Court upheld an earlier decision by the Ninth Appellate Arbitration Court, which had largely rejected a complaint by the Federal Tax Service, Interfax reported.

The claim amounts to roughly 200 million rubles ($7 million) for 2004 to 2006, the report said, citing no one. The British Council, the cultural arm of the British Embassy, has denied failing to pay taxes.

An embassy spokesman on Wednesday confirmed the court decision but refused to elaborate.

British Council director for Russia  Rosemary Hilhorst  said the details of the ruling were complex. “We are reviewing the judgment with our lawyers,” she said in an e-mailed statement.

Hilhorst added that the British Council was registered in Russia and pays tax here. The council “has complied with all requests of the tax authorities in respect of its activities,” she said.

The tax service now has three months to file a complaint at the Supreme Arbitration Court.

Calls to the tax service’s press office were not answered Tuesday.

The British Council received the tax claim in January 2008, following a diplomatic spat in which the Foreign Ministry forced the closure of the council’s offices in St. Petersburg and Yekaterinburg.

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