As is generally the case, the process of passing the Law was accompanied by active discussions between the Ministry of Finance of the Russian Federation, the Government of the Russian Federation and the business community. The Law actually reflects the government's budget policy parameters for the next three years, taking into account the views of the business community.
Part of the changes took effect on 1 December 2025, but most of the amendments enter into force on 1 January 2026. As of today, there are a number of provisions that have not yet taken effect.
This overview addresses general tax administration and tax control issues.
The Law introduces a number of new features in the Russian Tax Code, all connected with the entry into force of tax legislation. More specifically, amendments have been introduced to article 5 of the Russian Tax Code. Among other things, they stipulate that provisions on the entry into force of the legislative tax acts that establish restrictions on the application of tax preferences do not apply, in certain cases, to corporate taxpayers which are members of an international group of companies and are subject to article 288.5 of the Russian Tax Code.
Amendments to article 5 of the Russian Tax Code also provide that taxpayers who have obtained the status of a resident of an international highly developed territory can fix their tax burden (so that they are not subject to increased tax rates and new taxes in the future) as at the agreement execution date up until the time they forfeit the status of a resident of such a territory or up until the expiry of a 15-year period that starts to run from the moment the taxpayer procures the status of the resident of an international highly developed territory.
Article 11 of the Russian Tax Code introduces a new definition of property for tax purposes. The revised version of the definition of property includes types of objects of civil rights that, pursuant to the Civil Code of the Russian Federation (“Russian Civil Code”), relate to property, except for property rights. Of particular importance in the composition of property are:
- non-cash funds;
- uncertificated securities; and
- digital currency (including digital currency used as a means of payment under foreign trade agreements (contracts) within the framework of an experimental legal regime for digital innovations).
Tax administration
1. Recovery of outstanding debt from corporate accounts.From 1 January 2027, banks will be required to prioritise the performance of instructions from tax authorities. Amounts will be debited in the following order:
- from current rouble accounts;
- from foreign currency accounts;
- from precious metal accounts;
- from electronic money;
- from a deposit account or a precious metal deposit held by the taxpayer or a tax agent; and
- from a digital rouble account.
Recovery against cash in the accounts of the taxpayer (tax agent) who is the successor of the reorganised entity, its electronic money and digital roubles is carried out up to a negative balance in its unified tax account.
Amendments have also been introduced to article 69, clause 3 of the Russian Tax Code. According to these amendments, if a demand for the recovery of debt has been sent to an organisation that has ceased its operations as a result of a reorganisation, no further demand will be sent to the legal successor of that organisation.
3. Amendments to the Russian Tax Code have made it possible to recover tax arrears from the assets of the legal representatives of individuals. According to article 48, clause 8.1 of the Russian Tax Code, where debt is recovered from an individual at the expense of the property of his/her legal representative, the funds recovered from that legal representative shall count towards the satisfaction of the individual's obligation to pay tax, duties, insurance charges, penalties, fines and interest as a unified tax payment.
4. The Law clarifies the procedure for recalculating tax where an error is discovered, but it is not possible to determine the period in which the error occurred. By virtue of article 54, clause 1 of the Russian Tax Code the taxpayer is permitted to recalculate the tax base and the amount of tax for the previous tax period during the current tax period if an error was made resulting in an overpayment of tax and it is not possible to determine the period in which such an error occurred. The amendments have also introduced an exception to this rule and prohibited the recalculation of the tax base and the amount of tax for the current period if the tax rate for the current period exceeds the tax rate for the period to which the errors in question relate.
This change entered into force on 1 January 2026 and does not apply to any recalculations of the tax base or tax amounts carried out in 2025.
5. The Law addressed the issue of reinstating the amounts of debt deemed irrecoverable (article 59 of the Russian Tax Code). Therefore, if a decision of the registration authority to remove a legal entity from the Unified State Register of Legal Entities is revoked or declared invalid, any debt previously recognised as irrecoverable will be reinstated.
When, following the recognition of the individual's property tax arrears as irrecoverable, the tax authority receives information regarding the inheritance of property, such arrears shall be reinstated up to an amount not exceeding the value of the inherited property as at the date of the individual's death or the date on which the individual was declared deceased.
When, following the recognition of debt owed by a deceased individual as irrecoverable, the tax authority receives information that bankruptcy proceedings have been initiated against that individual, the debt in question shall be reinstated in the amount it was outstanding on the date of the individual's death or the date on which the individual was declared deceased.
These amendments enter into force on 1 September 2026.
6. The Law has amended the procedure for offsetting and refunding overpayments to a unified tax account in satisfaction of the third party's liability. Amendments to article 78, clause 2 of the Russian Tax Code have prohibited setting off a positive balance in the unified tax account against third party's tax liability where such third party has no corresponding liability.
The Law has, however, introduced the option of a partial set-off, which applies in the following cases:
- if the balance in the unified tax account is insufficient to fully settle a payment instruction by way of a set-off; and
- if a taxpayer has submitted a request to use the funds constituting the positive balance of their unified tax account to settle the tax liabilities of another person, but the amount of such funds exceeds the amount of that other person's liabilities in respect of taxes, duties, insurance charges, penalties, fines and/or interest.
In addition, a ban has been introduced on set-offs involving the amounts that were previously paid as compensation for damages resulting from criminal offences.
7. With regard to the possibility of another person fulfilling a taxpayer's obligation, the Law stipulates that, in the event of a transfer of funds by another person in satisfaction of a taxpayer's obligation, where no such obligation existed on or after the date of the transfer, the positive balance in the unified tax account resulting from such transfer shall be returned to the bank account from which the transfer was made; the tax authorities having details of such account.
Temporary rules on the calculation of late payment penalties have been extended by a year, until 31 December 2026 inclusive:
- for the first 30 calendar days of arrears – 1/300 of the Central Bank's rate on the amount in arrears;
- from the 31st to the 90th day – 1/150 of the Central Bank's rate; and
- from the 91st day until the date of payment – 1/300 of the Central Bank's rate.
8. Deferral, instalment plans and investment loans.
The ban on repeat deferrals or instalment plans has been extended to an investment tax credit. The amendments have also expanded the list of grounds for refusing a deferral, instalment plan or investment tax credit.
In addition, from 1 September 2026, the maximum term for investment loans will be extended from five to 10 years.
9. The amendments clarified the issue of the validity of a bank guarantee (article 74.1 of the Russian Tax Code). When a taxpayer has not exercised the right in relation to which a bank guarantee was provided to the tax authority, within three days of the date on which that tax authority receives an application from the taxpayer to release the guarantor who issued the bank guarantee, and in other cases, the tax authority shall notify the guarantor who issued the bank guarantee of its release from obligations under the bank guarantee.
10. Amendments have been made regarding the automatic registration of foreign entities for tax purposes following the verification of the accuracy of their details. During the second and third readings in the State Duma of the Russian Federation, amendments were made to articles 84 and 85 of the Russian Tax Code pursuant to which the tax authority is now obliged to register foreign persons for tax purposes upon receipt of information from the operator of the unified identification and authentication system confirming that such foreign persons have passed the verification of their details in accordance with the procedure established by the Government of the Russian Federation, and to forward, within the same timeframes, information on the registration of a foreign person or a stateless person to the Ministry of Digital Development, Communications and Mass Media of the Russian Federation.
11. In certain cases, the issue of notifications on registration with the tax authorities is replaced with the tax authority issuing an extract from the Unified State Register of Taxpayers.
If a foreign organisation is opening an account with a Russian bank, the tax authority is obliged to register the organisation within five days of receiving an application to register such organisation from the Russian bank where such organisation is opening an account and, within the same period, send an electronic extract from the Unified State Register of Real Property containing information on registration for tax purposes to the specified Russian bank, to be further transferred to such foreign organisation.
These amendments enter into force on 1 September 2026.
12. The deregistration of a foreign organisation that has received the status of an international company through redomiciliation on other grounds will be carried out by the tax authority based on information from the Unified State Register of Legal Entities on the state registration of such international company.
These amendments enter into force on 1 September 2026.
13. The Law has set a limit on the reduction of liability in the case of mitigating circumstances. The amendments revised article 114 of the Russian Tax Code, according to which a fine cannot be reduced by more than 10 times. In the case of mitigating circumstances, liability will be reduced in the manner and within the limits set by the Federal Tax Service of Russia. When determining the amount of the fine, the tax authority considering the case will take account of the circumstances mitigating liability for a tax offence, while considering the specifics established by the Federal Tax Service of Russia.
14. Tax authorities will have broader powers to request information from banks on the provision of a national payment instrument to an individual, a payment card, as well as full information on the provision of a deferment, instalment plan or investment tax credit. In addition to this, liability is introduced for the failure to provide such information (article 135.1 of the Russian Tax Code).
These amendments enter into force on 1 September 2026.
15. Tax liability is introduced for insurance companies in the form of a fine of 20% of the amount of tax unlawfully received by the taxpayer in connection with the provision of an investment tax deduction and/or a tax deduction for long-term savings of citizens in accordance with a simplified procedure based on false information submitted by the insurance company.
These amendments enter into force on 1 September 2026.
Controlled Foreign Companies (CFCs)
The Law revised article 25.13-1, clause 7, paragraph 3 of the Russian Tax Code, which introduced an additional condition for exempting CFC's profits from taxation by establishing a minimum profits tax rate in the state of incorporation of the CFC of no less than 15%.Therefore, the profit of a CFC, that is a holding company, is exempt from taxation if the following conditions are simultaneously met: (i) the state where the CFC is located is not included in the list of offshore jurisdictionsOrder of the Ministry of Finance of Russia
Transfer pricing (TP)
Article 105.14, clause 1, paragraph 3 of the Russian Tax Code has been amended to include an additional condition for recognising a transaction as being controlled: the place of residence or the place of registration or the place of tax residency of the relevant party to the transaction is a state or territory where the corporate profits (income) tax rate according to legislation is 15% or lower.Therefore, a transaction with a foreign person will be recognised as controlled regardless of whether such person is recognised as related to a Russian taxpayer if at least one of the following conditions is met: (i) the country of residence of such foreign person is included in the list of offshore jurisdictions or (ii) the profits tax rate in this country is 15% or lower.
Tax monitoring
1. The initially proposed simplified procedure for transitioning to tax monitoring was ultimately not adopted. Previously, the draft law proposed changes to article 105.26 of the Russian Tax Code, according to which, in order to switch to tax monitoring, only one of three conditions had to be met, rather than all of them simultaneously. However, the mentioned amendments were excluded from the Law.Therefore, the old rules remain in effect. According to them, in order to switch to tax monitoring, all three conditions must be met.
2. Organisations created as a result of reorganisations have been given the opportunity to retain the right to apply tax monitoring. Amendments were made to article 105.26, clause 3.1 of the Russian Tax Code, according to which the legal successor of a reorganised organisation that applied tax monitoring is released of the obligation to comply with the conditions for the transition to tax monitoring and retains the right to apply the specified regime.
3. The Law has expanded the list of grounds for the early termination of tax monitoring. The amendments have significantly revised article 105.28, clause 1 of the Russian Tax Code which establishes a list of grounds for the early termination of tax monitoring. The following cases were added to the list:
- the legal successor of the reorganised organisation did not join tax monitoring;
- documents previously submitted by an organisation that ceased its operations as a result of a reorganisation are no longer relevant for its legal successor;
- non-compliance of the information exchange regulations with the established requirements;
- systematic (two or more times) violation of the procedure and timeframes for accessing information systems;
- non-compliance of information systems with established requirements; and
- non-compliance of the internal control system with the established requirements.
Tax control
1. The Law has expanded the powers of tax authorities in relation to taking additional tax control measures. The Law has introduced a number of amendments to the Russian Tax Code by expanding the powers of tax authorities with respect to taking additional tax control measures. Amendments were introduced to:- article 31, clause 1, paragraph 3 of the Russian Tax Code and article 94 of the Russian Tax Code in relation to granting tax authorities the right to seize documents both within the framework of tax audits and when taking additional tax control measures for the purpose of reviewing audit materials;
- article 91, clause 1 of the Russian Tax Code, according to which access to the territory and premises is permitted during an on-site tax audit or tax monitoring or during the review of audit materials; and
- article 92 of the Russian Tax Code, according to which an inspection is to be carried out, inter alia, in cases where tax monitoring identifies contradictions between the submitted documents and the documents available to the tax authority, as well as during the review of tax audit materials.
3. The Federal Tax Service of Russia has been vested with the power to appoint tax authorities extraterritorially for conducting desk tax audits. Article 88 of the Russian Tax Code was supplemented with a provision stating that a desk tax audit may be conducted by a tax authority authorised by the Federal Tax Service of Russia. In such case, the taxpayer is given notice of an audit to be conducted by a special authorised body.
At the same time, taxpayers retain the right to submit documents and information to the tax authority to which they submitted the tax return in respect of which the desk tax audit is being conducted.
4. Now tax audit materials and the tax audit report may be reviewed by the tax authority using video conference facilities.
5. The procedure for considering complaints (appeals) against the decisions of tax authorities has been clarified. According to the revisions to article 140 of the Russian Tax Code, a complaint is to be filed with a higher tax authority in the usual manner, but the consideration of complaints and appeals may now be carried out by the tax authority authorised to do so by the Federal Tax Service of Russia on an extraterritorial basis.
In the original version, amendments were introduced to articles 138 and 139 of the Russian Tax Code of the Russian Federation and they provided that a complaint is to be filed with a special body. In the amended version of the Law, the taxpayer retains the right to file a complaint with a higher tax authority, but the procedure for its consideration has changed.
Conclusions and practical comments
Experts note that the changes and revisions introduced by the Law to the first part of the Russian Tax Code will significantly affect not only the tax administration system, but also tax obligations for specific taxes. There is no doubt that the legislator's change in understanding property for tax purposes will raise new questions on the formation of items liable to VAT and profits tax, since, by virtue of direct reference, non-cash funds, uncertificated securities and digital currency will be included in the category of property.When carrying out their activities, organisations should pay particular attention to the expansion of control powers of tax authorities of various levels during desk audits and additional tax control measures, as well as to the introduction of the possibility for the Federal Tax Service to independently delineate the powers of its territorial bodies.
In addition, according to the Federal Tax Service of the Russian Federation, in pursuance of the listed provisions of the Law, it was planned to issue 12 regulatory legal acts of the Federal Tax Service of Russia, which require additional monitoring and analysis. For the time being, we are aware of the publication of four such acts, one of which entered into force on 5 January 2026Order of the Federal Tax Service of Russia
The Denuo team would be pleased to provide assistance in connection with the implementation of these and other new amendments in the context of current business processes, including assessing tax risks, giving recommendations on business structuring and other matters.
