As CMS reported in the July 2010 issue of the Legal Digest, the amounts of individual tax fines set out in the Russian Tax Code were increased.

In turn, the Federal Tax Service (the “FTS”) has clarified the procedure for applying the updated fines as follows: 

  •  If a tax return has not been filed within the set timeframe, but the tax has been paid on time, a taxpayer is fined the minimum amount of RUB 1,000.
  • If the tax due is equal to 0 RUB, but the tax return has not been filed within the set timeframe, a taxpayer is fined the minimum amount of RUB 1,000.
  • The minimum amount of the fine for not filing a tax return (RUB 1,000) may not be decreased because of mitigating circumstances.

If a taxpayer files a tax return in paper form when he or she is required to file an e-version, he or she will be fined RUB 200. However, in this case, the tax authorities are not permitted to refuse a tax return filed in paper form.

Furthermore, the FTS has indicated that if a tax violation was committed prior to the legislative changes coming into effect, and a decision on the results of a tax audit was taken after the change, the taxpayer is required to pay fines according to the updated amounts.

However, this interpretation contradicts the Russian Tax Code, which stipulates that amendments that prejudice the position of a taxpayer may not be applied retroactively. Given that the tax authorities are guided by the position of the FTS, companies should be prepared to defend themselves when appealing the claims of the tax authorities in court.

[Federal Tax Service Letter No. ShS-37-7/16376@, dated 26 November 2010, “On the Procedure for Applying Federal Law No. 229-FZ, dated July 27, 2010, with Regard to Tax Sanctions”]