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Measures of support have been adopted for mobilised individuals and companies that they own

25.10.2022
12 min read
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Pepeliaev Group advises that the Russian Government has extended deadlines for making mandatory payments and for submitting tax reports and has established other measures of support for mobilised individuals and companies that they own.

Earlier this year deadlines for paying insurance contributions were extended for a number of categories of payers [1], as were the deadlines of the March advance profit tax payment [2]. The powers to extend the deadlines imposed by tax legislation have been vested in the Russian Government in March 2022 by the law on tax measures of support for business [3].

The measures that the Government has recently adopted [4] extend to two categories of persons:

  • mobilised individuals, that is Russian nationals drafted in accordance with the Russian President’s Order No. 647 “On announcing partial mobilisation in the Russian Federation” dated 21 September 2022 (the “Order”) for military service in the Armed Forces of the Russian Federation on the grounds of mobilisation.

The extension of the deadlines does not apply to those who are doing military service under a contract; neither does it apply to those who are taking part in the Special Military Operation as part of various volunteer paramilitary units.  
  • companies in which the mobilised individual is, as at the date when he is drafted in accordance with the Order for military service in the Armed Forces of the Russian Federation on the grounds of mobilisation, the sole founder (member) of the company and simultaneously exercises the powers of a single-member executive body (the “Company”).
Proceeding on the grounds of a literal interpretation of the adopted Resolution, it is specifically significant that the mobilised individual should be the sole member and simultaneously a single-member executive body of the Company as at the date when he is drafted for military service on the grounds of mobilisation. Therefore, technically the extended deadlines should apply also if the composition of the members or the single-member body then changes (for example, the mobilised individual himself transfers the rights by performing a transaction in the required form, or a representative of the mobilised individual performs under a power of attorney a transaction to transfer the rights or change the manager). However, we do not rule out that in practice the Russian Federal Tax Service may take a different stance.

The measures may be divided into several groups.[5]

1. Payment deadlines have been extended with respect to:

  • taxes (including advance tax payments) (except for personal income tax paid as a tax agent, corporate profit tax withheld at the source of the payment of income), levies (except for state duty and a fee for using wildlife resources), insurance contributions (including those paid as a fixed amount under compulsory pension insurance and compulsory medical insurance);

  • insurance contributions under compulsory social insurance against workplace accidents and occupational diseases.

The extension applies to taxes, levies and contributions that mobilised individuals pay both as individual entrepreneurs and as “ordinary” individuals. The main condition is that the deadline is not due as at the time when the military service on the grounds of mobilisation starts (that is, as at the day specified in the notification that is handed over based on a resolution of the mobilisation conscription commission). Therefore, the deadlines have been extended, for example, for mobilised individuals to pay property taxes (land tax, transport tax and personal property tax) for 2021 (the payment deadline is not later than 1 December 2022).                                                                                                            

The deadlines have not been extended for Companies and mobilised individuals to transfer, as tax agents, personal income tax and corporate profit tax, but the deadlines have been extended for them to pay VAT as tax agents.

The deadline extension period:

For the period when the relevant mobilised individual does military service on the grounds of mobilisation in the Armed Forces of the Russian Federation and until the 28th day, inclusive, of the 3rd month following the month when the period ends of partial mobilisation that was announced in accordance with the Order, or when the individual is discharged from military service on the grounds set out in the Order.

Upon the expiration of the extension period the relevant payments (except for the amount of tax on earned income and tax paid owing to the application of the automated simplified taxation system) are made in equal parts of 1/6 of the amount each month not later than the 28th day starting from the month following the month in which the extended deadline for the relevant payments falls due.

Issues may arise with respect to the termination of the extended deadline. The Order directly establishes three grounds for mobilised individuals to be discharged from military service:

  1. age;
  2. health condition;
  3. the coming into legal force of a court verdict to impose a punishment in the form of imprisonment.

The Order does not mention such a tragic ground which unfortunately may arise during a war, as the death of a member of the military, or him being declared dead by a court decision. However, it is obvious that this entails the termination of military service relationships. Personal tax obligations of the mobilised individuals as taxpayers that are individuals are terminated in this case (except for property taxes - article 44(3)(3) of the Russian Tax Code), while Companies’ tax obligations are not. The Resolution does not eliminate the uncertainty as to whether the extension of the deadlines terminates in this case (it seems that it does) and how taxes, levies and contributions should be paid: as a lump sum or with a deferral of 6 months.

2. The deadlines have also been extended for mobilised individuals and Companies to submit the reports set out in the Russian Tax Code and legislation on currency control:

  • the deadline for submitting tax returns (except for VAT returns), tax calculations regarding the amounts of income paid to foreign companies and of taxes withheld, calculations of amounts of personal income tax assessed and withheld by tax agents, calculations of advance payments and accounting (financial) statements.

The extension period is until the 25th day, inclusive, of the 3rd month following the month when the period of partial mobilisation ends or when the relevant mobilised individual is dismissed from military service on the grounds set out in the Order.

  • the deadlines for submitting to the tax authorities the data set out in the law “On conducting an experiment of establishing a special tax regime ‘Tax on earned income’”.

The extension period is until the last day, inclusive, of the 4th month following the month when the period of partial mobilisation ends or when the relevant mobilised individual is dismissed from military service on the grounds set out in the Order.

  • the deadline for submitting reports on the movement of monetary funds and other financial assets on accounts (deposits) with banks and other institutions of the financial market located outside Russia, and on transfers of monetary funds without opening a bank account by using electronic means of payment provided by foreign suppliers of payment services; notifications of accounts (deposits) being opened (closed) and of the details being changed of accounts (deposits) with banks and other institutions of the financial market located outside Russia.

The extension period for mobilised individuals for the reporting year 2021 and subsequent reporting years is until the last day of the 3rd month following the month when the period of partial mobilisation ends or when the relevant mobilised individual is dismissed from military service on the grounds set out in the Order.

The extension period for Companies for reporting quarters III and IV of 2022 and for subsequent reporting quarters is until the last day of the 3rd month following the month when the period of partial mobilisation ends or when the relevant mobilised individual is dismissed from military service on the grounds set out in the Order.

3. The scheduling and carrying out has been suspended of control measures with respect to mobilised individuals and Companies

This applies to the following measures: 

  • making resolutions to hold field tax audits, audits as to whether taxes have been paid owing to transactions having been performed between related parties, field audits of an insured party under a contract for compulsory social insurance against workplace accidents and occupational diseases, as well as holding already scheduled audits of the above types;
  • carrying out other measures of tax control, except for those carried out as part of desk audits of VAT returns, returns concerning excise taxes with an amount of tax claimed for reimbursement, personal income tax returns with an amount of tax claimed for repayment, as well as demanding clarifications under article 88(3) of the Russian Tax Code as part of desk audits of VAT returns;

  • the running of the statutory periods with respect to field audits;

  • the running of the statutory periods for documenting and examining the results of such audits and of making decisions;

  • the tax authorities making decisions to suspend transactions on bank accounts and transfers of electronic monetary funds;

  • the holding and scheduling of audits of compliance with Russian currency legislation;

  • initiating and employing control measures as part of federal state control over compliance with legislation on the application of cash register equipment.

The suspension period is until the 28th day, inclusive, of the 3rd month following the month when the period of partial mobilisation ends or when the relevant mobilised individual is dismissed from military service on the grounds set out in the Order.

4. Liability for specific violations will not apply

It is established that with respect to mobilised individuals and Companies for the period of the mobilised individual doing military service on the grounds of mobilisation in the Russian Armed Forces and until the 28th day, inclusive, of the 3rd month following the month when the period of partial mobilisation ends or when the relevant mobilised individual is dismissed from military service on the grounds set out in the Order, sanctions do not apply for violations relating to the non-submission of reports when those violations were committed in the specified period, and no proceedings are held with respect to such violations.

5. Specific deadlines in the area of customs regulation have been extended

In the area of customs regulation, the deadlines have been changed for performing notifications and adjustments to notifications of delayed amounts of customs duties, taxes, special, anti-dumping or compensatory duties, interests or penalties for:

  • mobilised individuals;

  • Companies;

  • customs representatives, provided that goods are declared on behalf and following the instructions of a customs applicant who is a mobilised individual or a Company.

For them the notifications are due on the 28th day, inclusive, of the 3rd month following the month when the period of partial mobilisation ends or when the mobilised individual is dismissed from military service on the grounds set out in the Order.

In conclusion, it is worth pointing out that the procedure for implementing measures of support does not require any involvement of the mobilised individuals themselves or Companies.

The list of mobilised individuals will be determined based on the data that the Russian Ministry of Defence submits to the Russian Federal Tax Service at least once every seven calendar days, including data on the date when the mobilised person obtains the status of a member of the military during the period of partial mobilisation in accordance with the Order and on the date when the mobilised individual is dismissed from military service on the grounds set out in the Order.

Subsequently, the Russian Federal Tax Service will determine what companies are subject to the measures and file information about mobilised individuals and companies with the Federal Customs Service and state non-budgetary funds.

What to think about and what to do

Mobilisation will affect the lives of hundreds of thousands of our compatriots. Taxation is not an issue of top priority for us to face. Nevertheless, we recommend that mobilised individuals should (if possible) determine who will be able to represent them before tax authorities, prepare powers of attorney for such representatives and transfer to them the data for using “personal accounts” on the tax authorities’ website. We also recommend that the representatives should monitor whether the “personal accounts” will show information about the extension of tax payment deadlines. In the event of any failures, please contact tax authorities for clarifications.

Help from your adviser

Pepeliaev Group’s lawyers have substantial experience of advising on taxation issues and representing taxpayers before tax authorities.

Our experts are keeping up to date with the latest developments in tax legislation and are ready to provide recommendations on how to apply them in practice.


[1] See the Government’s Resolution No. 776 dated 29 April 2022 and our alert:   https://www.pgplaw.ru/analytics-and-brochures/alerts/prodleny-na-god-sroki-uplaty-strakhovykh-vznosov-dlya-ryada-kategoriy-platelshchikov/  
[2] See the Government’s Resolution No. 470 dated 25 March 2022 and our alert:  https://www.pgplaw.ru/analytics-and-brochures/alerts/prodlen-srok-uplaty-martovskogo-avansovogo-platezha-po-nalogu-na-pribyl/
[3] See Federal Law No. 52-FZ dated 9 March 2022 and our alert:  https://www.pgplaw.ru/analytics-and-brochures/alerts/gosduma-prinyala-pervye-zakony-o-nalogovykh-merakh-podderzhki-biznesa/
[4] The Government’s Resolution No. 1874 dated 20 October 2022 “On measures of support for mobilised individuals”.
[5] All regulations regarding the measures apply to legal relationships emerging since 21 September 2022.

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