A legal dispute with the Federal Tax Service will soon be added to the list of numerous court proceedings launched by EAST BRIDGE BANK (Moscow) and the Central Bank of Russia. In May 2007, the bank was required to pay an additional R30 million in back taxes, which exceeded the 2005 net profit. The bank is set to dispute the decision. EAST BRIDGE BANK reported that it performed purchase-sale transactions involving bills of third parties and determined the profit tax on difference between selling and buying prices. But the Federal Tax Service stated that the reduction of the tax base as expenditures on stock transactions was illegitimate. If the bank loses the battle and pays back taxes, it will violate CBR capital requirements which may serve as a reason for the CBR to deprive the bank of its licence.
Source: WWW.KOMMERSANT.RU, August 3, 2007
