(Alliance News) - Eurasia Mining PLC on Thursday said its subsidiary Kosvinsky Kamen CJSC has won a litigation settlement relating to a mining tax claim against the tax authorities in the Supreme Court in Moscow.
The London-headquartered, mining and mineral exploration company, formerly focused on Russia said tax authorities applied a 3.5% tax rate on minerals that were already taxed at 6% or more. This followed an increase in the tax rate for certain minerals from 1% to 3.5% in order to unify the mining tax rate in Russia.
The firm said the increased tax rates pushed up Kosvinsky's tax charge to 22.75%, where it had already been paying 6.5%.
Eurasia said it challenged the "misinterpretation of the laws" by the authorities, and began a litigation process.
The process was unsuccessful in the lower court, but Eurasia said it challenged the decision, and has thus been successful in the Supreme Court.
As a result, the firm said it will be repaid the overpayments in full, with interest to be set by the central bank, covering a three-year period.
It noted that it has received GBP480,000 in a first tranche payment, giving it a cash position of GBP989,000 at December 31, giving it sufficient capital to meet its obligations up to the third quarter of 2024.
Chair Christian Schaffalitzky said: "We are delighted to have successfully won the litigation at the top level of the Supreme Court and we are extremely grateful to our in-house team and our advisers from Pepeliaev Group who assisted us on this matter."
Eurasia shares rose 11% to 2.05 pence each on Thursday afternoon in London.
By Harvey Dorset, Alliance News reporter
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Eurasia Mining (EUA)