Relaxation of criminal liability for tax crimes in Russia

Those prosecuted or investigated for the evasion of taxes and other obligatory payments in Russia can now seek the termination of proceedings against them or prevent proceedings from being instituted by paying the relevant arrears, penalties and fines in full. The Russian Criminal Procedural Code has recently been amended* to this effect.

The same law also amends the Russian Criminal Code to reduce the maximum prison sentence for tax evasion.

In particular, the maximum prison sentence imposed for the following offences is reduced to five years:

• evasion of taxes, payment of fees and insurance contributions (previously six years);
• failure to fulfil the duties of a tax agent (previously six years);
• concealment of money or property of an organisation or individual entrepreneur from which taxes, levies and insurance contributions should be collected (previously seven years).

These amendments change the qualification of these offences to crimes of medium gravity and reduce the limitation period for prosecution under these articles.

The provisions of this law apply to persons who committed the relevant acts before its entry into force on 29 March 2023.

All the above changes to criminal law should contribute to the improvement of the business climate (especially in the context of sanctions) and minimise the risks of unwarranted criminal prosecutions of business executives.

Businesses are also given the opportunity to correct those violations which have been committed for one reason or another. In this case, the offenders will not face criminal charges.

* In Russian