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. Last Updated: 07/27/2016

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What happens if I do not pay my Russian taxes?

Olga Boltenko, tax lawyer with LeBoeuf, Lamb, Greene & MacRae, writes:


If an expat does not pay his taxes and that non-payment is discovered, he will need to pay the outstanding taxes, interest for each day of the arrears at a rate of 1/365 of the Central Bank interest rate (currently 13 percent), and administrative or criminal fines.

Administrative fines are outlined in Chapter 16 of the Tax Code. If an expat has to submit a tax return but does not for a period of no more than 180 days after the due date, the fine can be 5 percent of the outstanding taxes per month. The total fine for this period cannot be higher then 30 percent of the arrears and no less than 100 rubles ($3.50).

If the period is longer than 180 days, then the fine will be 30 percent of the unpaid taxes plus a further 10 percent for each month after the 181st day. There is no limit.

There is an additional liability for nonpayment or underpayment of taxes. If an expat has not paid his taxes or paid less than he should have, he may be fined for up to 20 percent of the unpaid amount. If the tax was purposefully unpaid, the fine can be as high as 40 percent.

If there are mitigating circumstances, the court is given discretion to reduce the fine.

Administrative fines for nonpayment of taxes can be imposed up to three years after the nonpayment occurred.

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