MOSCOW, July 11 - RAPSI. The Supreme Commercial Court has upheld the tax authorities order for the Magadan Silver mining company, Polymetall subsidiary, to pay $21 million in additional taxes and penalties for exporting silver at give-away prices.
The court reversed the appeals court's decision in the dispute between Magadan Silver and the Federal Tax Service on July 10. The trial court turned down the company's complaint to quash the watchdog's decision to make it liable for tax violations in August.
After auditing the company's operations in 2007, the tax authorities charged Magadan Silver an additional 430 million rubles ($13 million) in profit tax and an exta 101 million rubles ($3 million) in severance tax plus penalties.
The tax authorities have established that the company sold silver to АВN AMRO Bank N.V. at excessively low prices using the foreign trade contracts of seven Russian companies.
Under six contracts, silver was to be exported at a price from 9.33 to 11.9 rubles ($0.28-0.36) per gram, which corresponded with the London precious metals market.
However, Magadan Silver sold the silver for 6.33 rubles ($0.19) per gram.
Polymetall is a gold and silver mining company with enterprises and projects in Russia and Kazakhstan. It maintained gold production at the previous level of 443,000 ounces (13.79 tonnes) and stepped up silver production by 15 percent to 19.9 million ounces (619 tonnes) in 2011.