The Supreme Court of the Russian Federation Remanded a Debtor’s Bankruptcy Case for Reconsideration Due to New Rules on the Single Tax Account
Previously, the courts dismissed the petition of the Federal Tax Service (FTS) to recognize the debtor as bankrupt, citing that the tax authority had asserted the same claims within the framework of the first bankruptcy case, which had been terminated due to repayment of the debt.
However, the Supreme Court of the Russian Federation indicated that with the introduction of the STA on January 1, 2023, the mechanism for debt collection has changed.
The Supreme Court of the Russian Federation clarified that a negative STA balance gives rise to a consolidated payment obligation for the taxpayer. If the company’s debt continued to grow and the balance remained negative since the first bankruptcy, then for initiating new insolvency proceedings the tax service does not require a new claim or a new decision of the tax authority. The very fact of a negative balance, which is reflected in the register and personal account, evidences the debt.
Thus, for the FTS to initiate bankruptcy, the existence of a negative balance in the STA is sufficient. This ruling of the Supreme Court of the Russian Federation strengthens the position of the FTS by simplifying the proof of their claims in bankruptcy cases.
