British Council in Court for Tax Bill

The British Council is embroiled in fresh dispute with the authorities, this time over taxes, less than six months after it was forced into closing its offices in St. Petersburg and Yekaterinburg.

The organization, which functions as the British government's cultural arm, said Wednesday that the disagreement hinges on a tax bill it received in May that it has only partially paid.

"We will complain ... about particular aspects of the tax demand with which we do not agree," the organization said in an e-mailed statement. "The British Council is registered with the tax authorities, it regularly pays taxes ... and carries out all the demands of the Russian tax authorities.

The council said it would not discuss the nature or amount of the tax claim while the issue had yet to be resolved.

The tax case was to be heard in Moscow's Basmanny District Court this Thursday, a council official said.

The official, who spoke on condition of anonymity because of the sensitivity of the issue, dismissed fears that this was a fresh attempt on the part of authorities to pressure the council.

"This is simply what happens to every Russian taxpayer," he said.

The official also played down a newspaper report that said tax officials had threatened to send bailiffs to seize property, including books, furniture, poetry and computers, from the council's Moscow office unless the bill was paid in full.

He said seizures of this type were standard procedure in cases where tax authorities believe that there is still an outstanding sum.

"This is simply what Russian tax law stipulates," he said.

The official refused to comment the report, published Wednesday in London's Guardian newspaper, saying an unidentified official at the council had described the bill as "punitive and disproportionately large."

The council also said in its official statement that the bill received by the council in May was the result of tax examinations carried out in 2007.

It was last year that the organization came under intense pressure to curtail its activities in the country, a demand that came during a period in which Russian-British relations sank to their lowest point since the Cold War.

In January, the council bowed to requests to close its offices in St. Petersburg and Yekaterinburg, the only two in the country remaining outside Moscow, after police questioned local staff in what Britain's foreign minister described at the time as unacceptable harassment.

Both sides linked the crisis to the diplomatic spat over the 2006 murder in London of former Russian security services officer Alexander Litvinenko.

Moscow has refused to extradite Britain's chief suspect in the murder, Andrei Lugovoi. The former Federal Guard Service officer, who has since won a seat in the State Duma with the Liberal Democratic Party of nationalist leader Vladimir Zhirinovsky, has attacked the British Council as a haven for spies.

The disputes with the British Council have centered on the nature of the organization. The Foreign Ministry maintains that the council is a commercial organization and must pay the requisite taxes and follow the relevant regulations. The British Council insists that it is a nonprofit organization with the sole function of promoting cultural exchange.

An official at the Federal Tax Service office handling the case refused to comment on Wednesday.