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On 8 December 2017 the Constitutional Court of the Russian Federation pronounced its Judgement in the case regarding the review of constitutionality of certain provisions of the Civil Code, the Tax Code, the Criminal Code and the Criminal Procedure Code

On 8 December 2017 the Constitutional Court of the Russian Federation clarified provisions on recovery of tax arrears of organisations from the latter’s former employees.

The case regarding the review of constitutionality of Articles 15, 1064, 1068 of the Civil Code of the Russian Federation, Article 31, para. 1, subpara. 14 of the Tax Code of the Russian Federation, Article 1992 of the Criminal Code of the Russian Federation, and Article 54, Section 1 of the Criminal Procedure Code of the Russian Federation was considered on 7 November 2017.  The case was initiated by the applications of Russian citizens Galina Akhmadeeva, Alexander Sergeev, Stanislav Lysyak.
History of the question
According to the court decisions issued on claims of tax authorities in respect of now-retired former accountant G. Akhmadeeva and ex-director of the municipal enterprise S. Lysyak, the damage caused by them during the commission of crimes (evasion from payment of taxes and concealment of funds or property of the organisation) in the amount of 2.7 and 8.2 million Roubles, respectively was covered from the respondents. With regard to G. Akhmadeeva the criminal case was terminated by an amnesty. In the case of S. Lysyak the case was also firstly terminated due to the amnesty, and then resumed. A. Sergeev, a former director-general of a distillery, who by the verdict of the court was found guilty in evading the organisation he directed from paying taxes, was sentenced to compensate the damage caused by the underpaid tax payments of the distillery in the amount of 142.5 million Roubles.      
Position of the applicant
The applicants claim that the challenged norms allow courts to recover from the individuals, brought to criminal liability for the commission of tax crimes, harm caused to the state by non-payment of taxes by the organisations whose officials they were. Moreover, due to the uncertainty of the concept of “harm” contained in the legislation, it is possible to equate the amount of taxes unpaid by the organisation to harm caused by an individual. Proceeding from this, the applicants ask to declare the disputed norms inconsistent with Articles 1 (Section 1), 2, 15 (Sections 1 and 2), 17 (Section 3), 18, 19 (Section 1), 34 (Section 1 ), 35 (Sections 1 and 3), 45, 46 (Sections 1 and 2), 47 (Section 1), 49, 50 (Section 2 and 3), 55 (Sections 1, 2,3), 64, 118 (Section 2) of the Constitution of the Russian Federation.   
Position of the Court
Being a legal person, an organisation participates in an illegal act in the tax sphere indirectly - through individuals, usually these are the head and the accountant. Acting in their own interests, as well as in the interests of their organisation, they commit an offense or a crime and bear administrative or criminal liability. At the same time, subjects of tax crimes, whose unlawful actions led to non-collection of taxes into the budget, are not exempt from the obligation to compensate for the caused property damage.
Provisions of Articles 15, 1064 of the Civil Code of the Russian Federation and subpara. 14 of para. 1 of Article 31 of the Tax Code of the Russian Federation in their normative unity do not contradict the Constitution.
They assume the possibility of collecting the damage caused by tax crimes in the amount of tax arrears and fines, not received by the budget from the taxpayer organisation, from individuals under claims of prosecutors and tax authorities. It is impossible to exact the penalties imposed on the organisation-tax bearer from the said individuals.
The fact of the termination of the criminal case in respect of these persons, as well as the conviction for committing tax crimes, cannot be regarded by the court as unconditional confirmation of their guilt in causing property damage.
The recovery of damage caused by arrears from individuals accused of committing tax crimes is excluded before entering information about the termination of a taxpayer organisation in the Unified State Register of Legal Entities or before the court finds that the organisation is in fact inactive and recovery of debts therefrom is impossible, except when the court establishes that a legal entity serves only as a “cover” for the actions of a natural person controlling it.
In determining the natural person’s liability, the court is entitled to take into account his or her property status, the fact of enrichment as a result of the commission of the tax crime, the degree of guilt, the criminal punishment assigned to it, and other significant circumstances.
Enforcement decisions on the cases of applicants are subject to revision in due course.
Presiding Judge Valery ZORKIN
Judge Rapporteur Sergey KAZANTSEV



08 December 2017

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