What will happen if you do not pay taxes in Russia?

In the article, we talk about criminal liability for non-payment of taxes in Russia.

In Russia, one can be held criminally liable under two main articles:
❗ Article 198 of the Criminal Code - Tax evasion by an INDIVIDUAL.
❗ Art.199 - Tax evasion by an ENTITY.

1. WHAT CONSTITUTES THE CRIME?

The Criminal Code states that evasion of taxes, fees and insurance premiums is criminalized.

What is evasion?
1) failure to file a tax return or other mandatory documents,
2) inclusion of deliberately false information in the tax return

There is ANOTHER mandatory condition, namely damage to the state and a certain amount of unpaid taxes, fees and insurance premiums. Moreover, for individuals and legal entities, this criterion is different.

INDIVIDUALS can be found legally responsible if they failed to pay more than 2.7 million rubles for the last three years in a row.

LEGAL ENTITIES, or rather their leaders, can be charged if they did not pay more than 15 million rubles for the last three years in a row.

If you do not pay taxes on smaller amounts, you cannot be found liable.

Crime committers may be considered the head of the taxpayer organization, the chief accountant (whose duties include signing the reporting documentation filed to the tax authorities), as well as other employees if they were specially authorized to file tax returns.

If everything is obvious with the leader (because he or she must manage overall operations), then to hold the chief accountant liable, the obligations for signing and filing reports must be written in their job description, in addition, he or she themselves should “take the fall".

2. HOW ARE SUCH CASES INITIATED?

The basis for initiating a criminal case in such cases has been the materials sent by the tax authorities to the investigative committee to bring a criminal charge.

As a rule, the case file already contains information obtained during a desk or field tax audit.

3. WHAT EVIDENCE SUPPORTS THE ACCUSATION AND HOW TO DEFEND YOURSELF?

• Firstly, the main base is, of course, the tax audit materials collected by the Federal Tax Service.

• Then, on the basis of these materials, the investigator:
– interrogates employees of the enterprise about the actual work performed and services provided;
– demands contracts, invoices, waybills;
– To do it, the investigator can go to the places to inspect the places where the goods are stored, the work was carry out, etc.;
– If necessary, face-to-face confrontations are held between employees if their testimony differs.

This list is basic but not exhaustive.

When defending in such cases, it is necessary to provide reverse evidence (documents and testimonies) of the actual performance of work and the provision of services, the supply of goods and, in general, the existence of expenses, due to which the taxable income was reduced.

4. WHAT IS THE LIABILITY FOR TAX CRIMES?

For non-payment of taxes by an INDIVIDUAL, liability is provided in the form of imprisonment for up to 3 years - if the amount of unpaid taxes is more than 13 million rubles for the last three years.

The punishment for responsible persons in ORGANIZATIONS is slightly higher, namely imprisonment up to 6 years.

5. HOW ALREADY INITIATED CRIMINAL CASES ARE TERMINATED

Two bases:
☑ All debt has been paid;
☑ The statute of limitations for prosecution has expired.

5.1. Termination due to payment

A person who has committed such a crime for the first time is exempted from criminal liability under two conditions:

The arrears and the corresponding penalties, and a fine in the amount determined in accordance with the Russian Tax Code, have been fully paid.

Besides that,
On March 18, 2023, the President of Russia issued Law N 78-FZ, under which, according to tax evasion reports, the investigator must now simply refuse to initiate a case

5.2. Termination of the criminal case due to the expiration of the statute of limitations for prosecution (without paying the debt).

The statute of limitations is the period within which a judgment must be passed.

If an individual or a legal entity failed to pay taxes in the amount of up to 45 million rubles, the limitation period is 2 years.

This means that if the court does not issue a verdict within 2 years from the date of filing an incorrect tax return, the case is simply terminated.

While in relation to the responsible persons of an LLC, when the amount of unpaid of tax is more than 45 million rubles, the limitation period is 6 years.



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