Federal Law No. 201-FZ of 26 June 2026 abolishes the minimum penalty for the late filing of 'nil' tax returns and simplifies the procedure for tax authorities to impose penalties for the late filing of returns showing tax payable.

The key change is that taxpayers will no longer be held liable for filing 'nil' tax returns after the statutory deadline, as provided for in the new paragraph 3 of Article 119 of the Russian Tax Code. This exemption applies to both individuals and legal entities.

As a general rule, the penalty for late filing of a tax return is 5% of the unpaid tax due under the return for each full or partial month of delay, capped at 30% of the unpaid amount. Previously, where the tax payable under a return was zero, a minimum penalty of RUB 1,000 applied.

According to the explanatory memorandum accompanying the draft law, the amendments are intended to relieve the tax authorities of the administrative burden associated with such minor offences, as the time and resources required to process them significantly exceed the revenue generated by the minimum penalties.

For taxpayers subject to paragraph 3 of Article 76 of the Russian Tax Code, filing a 'nil' return more than 20 days after the statutory deadline may still result in the suspension of transactions on their bank accounts. The amendment should therefore not be regarded as an unconditional relaxation of taxpayers' obligations. The legislature intends account suspensions to encourage taxpayers to submit overdue returns, including 'nil' returns. However, if a taxpayer fails to file a return despite the suspension of their accounts, the tax authorities will need to make additional efforts to establish whether the outstanding return would genuinely show no tax payable.

The amendments also simplify the procedure by which the tax authorities may impose penalties for the late filing of returns showing tax payable. If a desk tax audit establishes that a taxpayer, whether a company or an individual entrepreneur, has correctly reported the tax payable but filed the return after the deadline, and no other tax violations are identified, the tax authority is no longer required to prepare a tax audit report. Instead, the audit findings are considered without the taxpayer's participation, effectively in their absence. No additional tax control measures are undertaken in such proceedings.

This procedure may make it more difficult for taxpayers to present their defence before a decision is issued. Since missing the filing deadline itself constitutes a tax offence, taxpayers may submit written explanations, including arguments in their defence and evidence of mitigating circumstances, together with the late return. They may challenge a decision imposing a tax penalty by lodging an appeal within the statutory period, generally one month before the decision takes effect. The simplified complaints procedure under Article 140.1 of the Russian Tax Code may also be available for decisions issued under this new procedure.

Notably, according to the explanatory memorandum, the exemption does not apply where a taxpayer initially files a 'nil' return solely to declare a different, non-zero amount of tax at a later date without incurring a late-filing penalty. The legislature appears to be referring to a legal position already established in case law. If a taxpayer misses the filing deadline and subsequently submits a 'nil' return to avoid liability under paragraph 3 of Article 119 of the Russian Tax Code, but later files an amended return reflecting the actual amount of tax payable, the late-filing penalty is calculated by reference to the correct tax liability rather than the zero amount originally declared. In such cases, the applicable penalty is determined following the submission of the amended return.

These changes do not affect the established procedure under which taxpayers who, for whatever reason, have understated their tax liability in an original return voluntarily submit an amended return before the understatement is discovered. Before doing so, they must ensure that their unified tax account has sufficient funds to cover the tax arrears and accrued interest. Subject to the other statutory conditions being satisfied, these steps may provide grounds for exemption from liability for underpayment of tax under paragraph 4 of Article 81 and Article 122 of the Russian Tax Code.

Individuals, meanwhile, benefit from a separate exemption from penalties for the late filing of personal income tax returns (annual Form 3-NDFL) relating to income from the sale of immovable property or its receipt as a gift. The rationale is that the tax authorities have access to information from the property register and can therefore calculate the tax independently, without requiring the taxpayer to report the relevant income.

However, closer examination of this amendment reveals several potential pitfalls that taxpayers should be aware of:

• Other income that must be declared. Individuals are required to report all taxable income on which tax has not been withheld by a withholding agent. In addition to income from the sale of immovable property, this may include proceeds from the disposal of shares or interests in Russian companies, income from foreign sources and other taxable receipts. This raises an important question: if an individual misses the filing deadline, will the exemption still apply where the return includes not only income from the sale of immovable property but also other income, such as profits attributable to a controlled foreign company (CFC)? Neither the amended legislation nor the explanatory memorandum provides a clear answer.
   
• Potential liability for underpayment of tax. Even where a taxpayer is exempt from penalties for late filing under Article 119 of the Russian Tax Code, separate penalties may still apply under Article 122 for non-payment or underpayment of tax resulting from incorrect calculation, including the failure to declare taxable income. Earlier amendments to Article 214.10 of the Russian Tax Code empowered the tax authorities to calculate tax independently on income from the sale or receipt as a gift of immovable property where the taxpayer has failed to declare that income. However, the grounds for imposing penalties for underpayment of tax remain unchanged. Consequently, a question arises as to whether the tax authorities may impose a penalty under Article 122 in such circumstances. For example, a taxpayer may sell a property, 'forget' to declare the income and have the tax calculated by the tax authority using information obtained from the property register. The taxpayer may escape a late-filing penalty but still face potential liability for underpayment if the statutory conditions under Article 122 are met. For income reported in a personal income tax return, the general payment deadline is 15 July of the year following the reporting year. Incomplete property register information. Information received by the tax authorities through inter-agency exchanges may be incomplete or insufficient to calculate the tax correctly. For example, the register may not contain details of the original acquisition costs incurred by a donor who subsequently transferred a property to a close relative as a gift. Taxpayers are therefore strongly advised to take an active role in calculating and verifying their own tax liabilities.
   
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This material has been prepared solely for informational and/or educational purposes and does not constitute legal advice or a legal opinion. EPAM Law, its management, lawyers, and staff cannot guarantee the applicability of such information to your specific circumstances and accept no liability for any decisions you make, or for any direct or indirect losses and/or damages arising from the use of the information contained in these materials, in whole or in part.