The Russian government has introduced a temporary waiver of penalties for late VAT return filings by companies and individual entrepreneurs under the Simplified Tax System (STS) that have become VAT payers for the first time. Here’s how this benefits businesses and how to leverage the new measure without exposing operations to risk.
Key Changes
Effective January 1, 2025, businesses on the STS that have newly transitioned to VAT will not face penalties for missing the deadline on their first VAT return for any quarter of the year. The waiver, formalized under Russian Government Decree No. 530 dated April 23, 2025, is designed to give companies time to adapt—reconfiguring accounting systems and familiarizing themselves with reporting requirements.
Impact on Russian Businesses
The measure eases the burden on small and medium-sized enterprises (SMEs) navigating VAT compliance for the first time. Previously, late submissions incurred fines of 5–30% of the tax due (with a minimum penalty of RUB 1,000). While businesses can now avoid penalties, they should note that the waiver applies only to the first overdue return.
Mitigating Risks and Ensuring Compliance
Even with the waiver, errors in calculations or missed deadlines may still draw scrutiny from tax authorities. To avoid dedicating excessive time to mastering complex VAT rules—or risking financial penalties—businesses are advised to outsource compliance to professionals.
Acsour’s Recommendations:
Secure reliable accounting support for your business:
Key Changes
Effective January 1, 2025, businesses on the STS that have newly transitioned to VAT will not face penalties for missing the deadline on their first VAT return for any quarter of the year. The waiver, formalized under Russian Government Decree No. 530 dated April 23, 2025, is designed to give companies time to adapt—reconfiguring accounting systems and familiarizing themselves with reporting requirements.
Impact on Russian Businesses
The measure eases the burden on small and medium-sized enterprises (SMEs) navigating VAT compliance for the first time. Previously, late submissions incurred fines of 5–30% of the tax due (with a minimum penalty of RUB 1,000). While businesses can now avoid penalties, they should note that the waiver applies only to the first overdue return.
Mitigating Risks and Ensuring Compliance
Even with the waiver, errors in calculations or missed deadlines may still draw scrutiny from tax authorities. To avoid dedicating excessive time to mastering complex VAT rules—or risking financial penalties—businesses are advised to outsource compliance to professionals.
Acsour’s Recommendations:
- Ensure accurate preparation and timely submission of VAT returns.
- Stay updated on evolving regulations to minimize compliance risks.
- Proactively adapt accounting practices to meet new requirements.
Secure reliable accounting support for your business:
