BGP Litigation senior associate Denis Savin speaks with Interfax about the freezing of taxpayers' accounts in the event of failure to make advance payments
06.04.2017

"In practice, tax officials regularly freeze corporate accounts for failure to make advance payments, says Denis Savin, senior associate with BGP Litigation".

"The suspension of transactions on accounts carries significant operational risks for a business. Freezing an account can stop payments from being made under agreements with suppliers and lenders, resulting in transactions with purchasers being aborted, says D. Savin. He notes that this can lead to financial losses and adversely affect a company's business reputation, while the most dire consequences await highly leveraged businesses".

Expanding on his earlier comments (regarding the case of Geriatr-M, which challenged the freezing of its account by tax officials due to failure to file a return), Denis Savin notes that in the respective ruling the Supreme Court of the RF upheld the position of the Supreme Arbitrazh Court of the RF (Decree of the Plenum of the Supreme Arbitrazh Court of the Russian Federation No. 57 of 30 July 2013 On Certain Issues Arising in Connection with Application of Part One of the Tax Code of the Russian Federation by the Arbitrazh Courts) that the tax authorities are entitled on the basis of Art. 76(3) of the Tax Code of the RF to freeze an organization's accounts only in the event of failure to file a tax return. Failure to make advance payments of tax is not a ground in law for freezing accounts. 

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