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MOSCOW, March 27 (Itar-Tass) – The prosecutor for the state began to present evidence in the tax evasion case against auditor of Britain's Hermitage Capital foundation Sergei Magnitsky, who died in a remand prison, and the foundation's director general, British citizen William Browder.
Anastasia Gerasimova of the Federal Tax Service /FNS/ was the first to be questioned. She noted that the defendants' actions "caused damage to the budget at all levels - local, regional and federal."
In 2001, the profit tax was regulated by a special law and made up 35 percent which were deducted to the budget of three levels - local /5 percent/, regional /19 percent/ and federal /11 percent/.
In Kalmykia, profit tax incentives applied under certain conditions. One of them was investment in the republic's economy. Browder set up the Kalmykia Business Center in which the company he had created allegedly invested money. "In actual fact, it invested 1,000 roubles, which essentially cannot be viewed as investment. Therefore, the organization did not engage in investment activities, but exploited the easy terms of the profit tax," the FNS representative said.
Gerasimova also said Browder had illegally used the incentives in giving jobs to handicapped persons. He set up an organization comprising three persons Browder himself and two handicapped persons who were formally employed.
They were listed as financial analysts, but did not do any work. So they did not receive wages, just a small remuneration for being listed as the firm's employees; they had permanent jobs elsewhere.
Browder's firms therefore paid 5.5 percent each instead of 35 percent. Three checks of these firms were carried out, but it was not possible to expose the schemes immediately, as the "taxpayer provided fake documents."
Answering the prosecutor's question about who is responsible for tax law violations, Gerasimova replied that they are "the company owner and the accountant's office."
The FNS official said the estimated 522 million roubles of damage was "a justified sum."
At the beginning of the hearing, the defense asked the prosecutor to specify the evidence and name the witnesses to be questioned. "The witnesses' queue is a tactic of the prosecutor for the state, which I don't intend to share with you," prosecutor Mikhail Reznichenko said.
The prosecutor plans to question 39 witnesses.
Magnitsky and Browder are accused of failing to pay 522 million roubles worth of taxes /Article 199, Part 2 of Russia's penal code/. The investigators said they had forged tax declarations and misused incentives intended for disabled persons. Police also suspect Browder of involvement in the theft of Gazprom shares, which made a separate criminal case.