Any businessman can be charged with a crime

Increasing liability for company heads and business owners is becoming a modern trend. Entrepreneurs are apprehensive due to the fact that today companies being held liable for tax offences has smoothly turned into pressure on business on the part of the investigative authorities, and the decision on a market participant’s bankruptcy is immediately accompanied by increased interest of the law enforcement agencies.

Examining the inners of a contracting partner

Partner at Capital Legal Services Irina Onikienko spoke about tax and criminal risks arising out of companies working with fly‑by‑night firms. Ms. Onikienko presented the statistics, referring to the SPARK-Interfax database: 30-40% of Russian companies today are fly‑by‑night firms. About 40,000 companies per month are liquidated, 800 bankruptcies are initiated each month, and 21% of companies change directors and their addresses, while 18% of companies list invalid telephone numbers. It is obvious that the business environment needs to be rehabilitated, Irina notes.

According to Irina Onikienko, the struggle against fly‑by‑night firms started as early as the 2000s, however fruitless, and now we are witnesses to another campaign. Tax authorities have taken to a stricter approach in the course of inspecting business operations of companies with firms having signs of fly‑by‑night entities; the court practice increasingly supports the tax authorities. “Today, companies being held liable for tax offences has smoothly turned into pressure on business on the part of the investigative authorities, who, starting from 2015, are entitled to independently initiate criminal cases for crimes connected with failure to perform tax obligations. Criminal cases, generally, are initiated under Article 159 of the Criminal Code (fraud) or Article 199 of the Criminal Code (evasion of company taxes and/or levies),” Irina Onikienko added. According to her, in 2015, initiation of criminal cases brought a tax increase of 86% as compared to 2014 (in total 15 billion rubles additionally). Based on different sources, the number of tax criminal cases increased from 46% to 68%; however, the number of convicts is constantly dropping. The answer is simple, Ms. Onikienko notes, the goal of criminal cases being initiated is not court proceedings or holding the culpable persons liable, but rather revenues for the state budget. Often a case is initiated not because a crime is detected in the director’s actions, but because the tax authority has assessed an amount payable to the state budget. This provided, in such a situation the companies have to “buy out” the director until the court settles the issue on legality of the tax authority’s decision.

“In such conditions I can give companies two basic recommendations: be responsible about relations with contracting partners, examine their internal structure before signing an agreement and monitor their status within the period of work. In the event of claims from the tax authorities and law enforcement agencies, do not retreat and actively prove your case,” Ms. Onikienko adds.

Full article is available at https://www.kommersant.ru/doc/3311099