The Russian Federal Tax Service on suspending the collection of tax debts: a new letter and new doubts

The Russian Federal Tax Service has published Letter No. ED-20-8/53@ dated 27 April 2020 according to which the suspension of measures for the collection of tax debt has been extended until 31 May 2020. Therefore, the timeframe of the suspension which is now provided for by Letter No. ED-20-8/37@ dated 3 April 2020 has been extended by one more month.

As in the previous Letter it is provided that if the non-collection of debt may cause the concealment of assets and other actions preventing the collection, debt may be collected, but with the prior agreement of the Head of the tax authority of the higher level. But if it followed from Letter dated 3 April 2020 that the industries most affected by the pandemic are protected from collection in any case, then the Letter dated 27 April has no reference with regard to these taxpayers. This means that in the case of a threat of the concealment of assets, etc. in May the decision on whether to collect the debt may be issued with regard to any taxpayer even if in April this question was unclear.

However, the doubts still more or less remain concerning who is covered by the new Letter. Firstly, at the beginning the Letter directly states that the suspension covers all taxpayers, but further specifies for some reason: “including with regard to taxpayers information about which is entered in the unified register of middle-sized and small businesses, and performing activity in the sectors most affected in the conditions of the deterioration of the situation in connection with the spread of the new coronavirus infection”. If the Letter is designated for all taxpayers then this specification is obviously superfluous.

Secondly, the announcement of the Letter of the Federal Tax Service’s website https://www.nalog.ru/rn77/news/activities_fts/9751885/ specifies that: “Collection measures will not be applied to legal entities and individual entrepreneurs information about which is included in the unified register of medium-sized and small businesses performing activity in the sectors most affected by the coronavirus infection” Did the Federal Tax Service want to emphasise its loyalty to medium-sized and small businesses and affected sectors, or this means that the Letter is aimed only at them? If you read only the announcement without the Letter itself, the second is more likely.

To sum up, we can say only one thing: middle-sized and small businesses as well as taxpayers from the most affected sectors are for sure protected from collection until the end of May if they will not use this time for concealing assets and other actions aimed at avoiding collection. The remaining taxpayers simply have to wait for explanations of the Federal Tax Service or to discuss their debt with the situation centre and their tax inspectorate.