MOSCOW, July 8 (RAPSI) - The Supreme Commercial Court has suspended the collection of over 500 million rubles (over $15 million) of additional taxes, fines and penalties from the Russian Authors Society (RAO) at its request until the end of the review proceedings, a court spokesperson told RAPSI on Monday.
The RAO claims that the collection of taxes, fines and penalties under a court decision which it has appealed could bankrupt the society and prevent it from honoring its obligations to Russian and foreign rights holders and also its employees. The society has filed a request to have the case reviewed.
On May 31, the court of appeals upheld a ruling by the Moscow Commercial Court confirming the tax claim. The precise amount the society was ordered to pay is not known because the hearings were held behind closed doors.
According to the Federal Tax Service, the legality of additional tax charges amounting to around 90% of the total of 560.1 million rubles (around $17 million) has been confirmed.
It was earlier reported that the service's Moscow department had ordered the society to transfer over 560 million rubles (around $17 million) to the tax service in additional charges for VAT, profit tax, tax on income derived by a foreign company from sources in Russia, as well as penalties and fees.
The additional charges arose from overdue accounts payable.
The society said earlier that it had collected 2.7 billion rubles ($82.5 million), of which it paid only 2.27 billion rubles ($69.4 million) to copyright owners. The money transferred into its accounts does not belong to the society and is meant to be distributed between the copyright owners, the society said in court.
The interest it deducts is fully spent to cover the costs of collecting, distributing and paying royalties as stipulated by its annually approved estimate. Therefore, the foreclosure on these accounts would violate the rights of copyright owners.
The society said in court that charging it over 560 million rubles would infringe upon the rights of more than 26,000 copyright owners who would not receive their royalties in full. Their average monthly royalties total 109.644 million rubles ($3.35 million).
The Russian Authors Society represents the interests of nearly 2 million foreign copyright holders in the field of music in Russia.