Russian law enforcement authorities have developed a draft of a new article of the RF Criminal Code "Tax Fraud". Natalya Kornienko, Head of the Tax System Development Department, the Gaidar Institute, spoke on Radio 1 about particular cases of fraud and the pertinence to introduce a new article on tax fraud.
“Life is always full of events. For example, a company headed by a director, chief accountant and the founder, decided to join the chain of VAT evasion and steal VAT from the budget or provide someone with such an opportunity.

The question arises: is their act related to tax evasion or to fraud? If they do it in the interests of their obligations, it can be classified as tax evasion, however, when they do it for someone and receive a reward, it is closer to fraud. In this case, they did not have to pay this tax to the budget, but they were complicit. 

Natalia Kornienko explained: “The issue, in my opinion, is different. If we introduce a new article on “tax fraud,” does this mean that Article 159 of the Criminal Code will no longer apply to tax crimes and to situations when persons committing acts that help others to evade taxes, are considered as law violators. Who are they: simply “cheaters” or “tax fraudsters”?  Will this new article overlap with Article 199 of the Criminal Code "Tax Evasion"? This is a huge issue that will specifically affect human life.  In this case, it would be particularly interesting to know what kind of punishment initiators envisage, as application of the Article 159 of the Criminal Code is a rather severe punishment, i.e. up to 10 years in prison, and Article 199 of the Criminal Code provides for up to 6 years. Much will depend on what formulation the initiators will propose, because, presently, we do not know this formulation. There is just an announcement that such an initiative has appeared".

She also added that the new article can affect not only legal entities, but also individuals.

The expert concluded: “This article is intended for entrepreneurs, however, it can also affect the individuals. If an individual enters into agreement with an enterprise that should pay him dividends, and instead of paying dividends, for example, they lend him money. Some do not want to pay VAT on their own, while others help them, i.e. they come up with contracts, conclude agreements with banks. Those who negotiate, they are the cheaters, who did not evade the tax, but have complicit. The two sides violate the law".