The bill on forged invoices is back on the agenda

Last Friday a bill criminalising the sale of forged tax documents passed its second reading.

The bill was introduced back in 2022, but the business community then received it with caution, fearing that the proposed wording would expose taxpayers themselves, including those acting in good faith.

In the current text the emphasis has moved from taxpayers to the organisers of schemes that use front companies and forged documents to manufacture a false tax record. The position is not, however, free of difficulty.

Liability

1. Deriving income on a large scale (from RUB 2.25 million to RUB 9 million) by organising the submission to the tax authorities, and (or) the sale, of knowingly forged invoices and (or) tax returns (calculations) is punishable by a fine of RUB 100,000 to RUB 300,000, or by compulsory labour for up to 4 years, or by imprisonment for 4 years.

2. The acts in point 1, committed by a group of persons acting by prior agreement, or by an organised group, are punishable by compulsory labour for up to 5 years, or by imprisonment for up to 7 years.

3. The acts in point 1, where they involve income on an especially large scale (RUB 9 million or more), are punishable by compulsory labour for up to 5 years, or by imprisonment for up to 7 years.

• An invoice and (or) a tax return (calculation) is forged if it contains false information about a shipment of goods, the performance of work, the provision of services, or a transfer of property rights.

The bill is aimed first of all at the producers, suppliers and intermediaries of these fictitious services. Room remains, however, to proceed against a buyer, where the buyer's acts can be classified as part of an organised group or of a prior agreement.

If the purchase of forged invoices is treated as complicity in the scheme, or if the company's management takes an active part in arranging the purchase and the filing of the documents, the law-enforcement authorities may seek to classify the management's conduct as participation in a criminal group. In such a case a prosecution will turn on evidence that the managers knew of the organisers' activity and took part in it.

For a business that makes active use of forged invoices, the risk of being proceeded against is growing, particularly where investigators can show that the company did not merely use the services but knowingly joined the conspiracy. Sergei Pivovarchik, managing partner of Consul Group, comments on the bill.

On 28 November 2024 the bill is to be considered at third reading.

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