BGP Litigation senior associate Denis Savin speaks with RBC about the Tax Code amendments of 1 December 2016

"The amendments relate to paragraphs eight and ten of Art. 45(2)(2) of the Tax Code. Those paragraphs provide that arrears can be recovered through the courts from the affiliate structures of a debtor company if the latter has transferred earnings, money or other assets to such structures. In the new wording of the article, the word "organizations" has been replaced with the word "persons". Essentially this means that tax officials can now collect unpaid taxes not only from related organizations, but also from affiliated individuals such as founders or shareholders, explains Denis Savin, a lawyer at BGP Litigation. The new statutory provision entered into force immediately, with effect from the date of enactment of the law. 

The provision on recovery of tax arrears from affiliated organizations was introduced in 2013 to combat the widespread practice among companies of initiating bankruptcy when major tax claims were brought against them following an audit, says the lawyer. While the loophole remained open, the business in question would not stop, but instead would be transformed into a new legal entity to which the assets, staff and contracts would be transferred. 

And under the previous wording of this statutory provision taxes could be recovered from organizations only. As a result, dishonest taxpayers tended to transfer their assets to individuals, including those who have the status of a sole proprietor. Formally, the tax authorities did not have any grounds to bring claims against such taxpayers, and no such claims were seen in practice. "Now, that restriction has been lifted for the fiscal authorities", says Savin". 

The full article (in Russian) is available here: "Физлица ответят за долги компаний перед налоговиками".