Khodorkovsky Faces $700M Personal Tax Bill

Russia’s tax authorities added to the woes of jailed oil magnate Mikhail Khodorkovsky by bundling a $700 million personal tax demand into his trial for fraud and tax evasion, the Reuters news agency reported on Wednesday.

Khodorkovsky, behind bars since October, is both Russia’s richest man and its most famous prisoner. He is also the main owner of oil firm YUKOS, which faces a separate tax demand of $3.4 billion for the year 2000 alone.

The double-barreled legal assault on YUKOS and its main owner is widely seen as punishment by the Kremlin for Khodorkovsky’s overt political ambitions, and has reopened questions about Russia’s commitment to free enterprise.

Khodorkovsky’s lawyer Anton Drel has said that he faced two demands —- one from the Taxation Ministry and one from a regional branch of the ministry.

He will stand trial alongside another big YUKOS shareholder, Platon Lebedev, whose lawyer said he also faced a much smaller tax bill of 7.7 million rubles ($265,200).

The two businessmen face seven criminal charges, including that of fraudulently acquiring 20 percent of the shares of Apatit, a fertiliser firm which was privatised in 1994, a representative of the prosecutor general has said.

They are also charged with avoiding taxes and fraudulently obtaining state funds in their capacity as YUKOS bosses in 1999-2000. The prosecution says they set up false companies so YUKOS could sell oil in areas with advantageous tax rates.

It also alleges YUKOS paid taxes with company promissory notes rather than with cash, thereby avoiding more than 17 billion rubles in tax, the prosecutor’s representative said.

HERE