Lawyers predict new criminal cases against bloggers

Lawyers predict new criminal cases against bloggers published an article about the fact that in March 2023, investigators suspected two bloggers of evading mandatory payments by using the simplified tax regime. 

Lawyers say that the scheme itself is not new and in recent years the Russian Federal Tax Service often reveals such violations. Popular Internet users could find themselves in the spotlight, as their income today is comparable with the revenue of medium-sized companies. However, a responsible approach to doing business in this young sphere has not yet taken shape. Probably, claims of the authorities to other bloggers are inevitable in the future.

Mikhail Begunov, managing partner of Tax Compliance, provided commentary in this article and noted that many bloggers use their friends, employees or relatives. And the total proceeds are distributed among the controlled individual entrepreneurs so as not to exceed the allowable limit for simplified taxation.

Exceeding this threshold entails the transition of the company to a common system of taxation and additional payment of VAT and income tax on all turnover.

If a company that has exceeded the threshold does not pay additional taxes on its own, the tax authority will do it for the company, and penalties and fines will be charged - that will be tax liability for the offense. And criminal liability already comes for the failure to pay these taxes on the grounds that are established by the Criminal Code of the Russian Federation. This scheme is also called "splitting the business" and it is often used in business in a wide range of industries. In our practice, there are quite a lot of claims from the tax authorities on business splitting, as the detection of this violation is one of the trends of the Federal Tax Service of Russia in recent years.

"In my opinion, bloggers have come to the attention of the Federal Tax Service of Russia as ordinary entrepreneurs who used schemes to "split the business" and did not pay attention to the structuring of their business and knowledge of tax law. In addition, the field of bloggers now show quite significant financial growth, which entails the attention of the fiscal authorities. For other IEs - (not bloggers) also carry out tax control measures and some agree and pay additional taxes voluntarily, and some enter the inspection and dispute. Every entrepreneur (regardless of whether he is a blogger or a farmer) should keep track of his tax records and the threshold of the simplified taxation system, because it generates a tax violation, which in the future will already lead to criminal cases, which now everyone is talking about" - said the managing partner of Tax Compliance Michael Begunov.

You can read the full article at the link.