Businesses in Russia need additional support measures in order not to catch a wave of bankruptcies in 2021

MOSCOW, Dec 26 - RIA Novosti. Businesses affected by the coronavirus in Russia need additional support measures to prevent a chain wave of bankruptcies from overwhelming companies after the New Year holidays, Tax Compliance lawyer Andrei Solomyanyi told RIA Novosti.

"Due to the fact that there is currently and until 2021 a moratorium on bankruptcy for organizations that have been hit hardest by the pandemic, there may be a situation at the beginning of the year in which many legal entities will resort to going through the bankruptcy process at one time," Solomyanyi said.

This risk, according to him, concerns not only the organizations under the moratorium, but also their creditors. He said that this risk affects not only the organizations under the moratorium, but also their creditors. "They may face the mirror consequences: the organization was not able to pay the debt and did not file for bankruptcy, but at the beginning of the year it initiates this procedure. Accordingly, the creditor will not receive any money, for him it can become the cause of his own financial insolvency," explained the lawyer.

The government needs to take the most effective measures to mitigate the consequences of the moratorium and the completion of tax deferrals, he said. Such measures are especially necessary for small and medium-sized companies from the hardest-hit industries, which have previously received support in the form of tax deferrals: at the beginning of the year they will have to pay taxes in full, and this could become another reason for bankruptcy.

"If the Russian government does not take any measures and does not form a unified understanding of the gradual way out of the moratorium situation, it will directly lead to a high number of bankruptcies," Solomyanyi is sure.

The Russian government has introduced a moratorium on the initiation of bankruptcy proceedings at the request of creditors against certain categories of debtors as a measure to support business in the context of the coronavirus pandemic. This measure applies to backbone and strategic enterprises, as well as to organizations and entrepreneurs in the most affected spheres of activity. Such spheres include, for example, air transportation, tourism, catering, sports and physical culture, culture and consumer services. The moratorium will be in force until January 7, 2021.

...

You can view the full article in RIA Novosti.