Tax Collection from Related Persons: When Tax Exposure Follows Transferred Business

On 4 September 2025, the Fifth Arbitration Court of Appeal in its Ruling No. 05AP-3681/2025 upheld the tax authority's right to collect a company's tax debt from its related persons, in accordance with the procedure established by Article 45 of the Russian Tax Code.

The court confirmed that, given a combination of circumstances outlined in the Code (formerly subclause 2, clause 2, Article 45; from 01.01.2023, clause 3, Article 45), the tax liability follows the fate of the funds and other property (property rights) transferred by the taxpayer to the dependent party.

The court's judgement is fully consistent with the earlier judicial decisions that sided with the tax authorities (for example, Ruling of the Arbitration Court of the East Siberian District No. F02-1593/2025 dated 29 July 2025 in case No. A33-37672/2023, Ruling of the Arbitration Court of the North-Western District No. F07-2484/2025 dated 17 June 2025 in case No. A66-17550/2023, and others).

When can a tax debt be collected from a related person?

Recovery of tax debt is possible only through court proceedings and upon proving the following cumulative conditions:

• the taxpayer has had a debt outstanding for more than three months, as established by a tax inspection;

• the impossibility of recovering this debt from the taxpayer, as confirmed through enforced collection procedures;

• proven facts of both the mutual dependency of the taxpayer and another entity and the transfer of funds, property, or other resources from the taxpayer to that entity in order to evade their tax liabilities.

Key takeaways for taxpayers

• Transferring a business to a new legal entity after the taxpayer has become aware or should have become aware of an appointed tax inspection will not help avoid paying additional taxes assessed as a result of that inspection.

• For the purposes of intra-group reorganisations, the interdependence of parties should be assessed not only against the formal criteria of Article 105.1 of the Tax Code, but based on a broader set of factors considered by tax authorities and courts. For instance, shared clients, employees, infrastructure, and IP addresses can indicate a connection between two entities.

• If a business purpose exists for transferring operations and/or assets to a related person, a ‘defence file’ should be compiled, justifying this purpose and demonstrating the absence of intent to default on the tax liability.

Stay up to date with the latest news and issues in corporate tax with FBK Legal!