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Lufthansa loses appeal over $10 mln Russian tax claim

MOSCOW, June 26 (RIA Novosti) - Moscow's arbitration court upheld Thursday a 230 million ruble ($10 million) tax claim against German airline Lufthansa AG's Russian operator.

"The court has rejected the [airline's] appeal," the judge said.

The Russian government has frozen several bank accounts belonging to Deutsche Lufthansa AG in Russia over tax payments.

Moscow city tax authorities filed a back-tax claim in December 2007, including bills for sales tax, road tax, and housing and social infrastructure maintenance tax.

Lufthansa lawyers argued that under an air communication agreement, signed between the U.S.S.R. and West Germany in 1971, Lufthansa was exempt from taxation in Russia, and Aeroflot from taxation in Germany.

Russian tax authorities, however, said that did not apply to turnover taxes.

Analysts said Lufthansa also had problems with other Russian agencies. For instance, the Transport Ministry wants Lufthansa's Asian-bound freight aircraft to land in Novosibirsk or Krasnoyarsk, rather than in Astana, the capital of Kazakhstan, in order to boost local air traffic and airport profitability. However, the German airline is in no hurry to meet this demand, citing inadequate technical standards at Siberian airports.

In October 2007, Russian aviation authorities refused to extend the overflight license for Lufthansa Cargo, but several days later issued a temporary permit.

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