The Federal Tax Service is examining tax savings through closed-end mutual funds

The story of using a closed-end mutual fund (ZPIF) for tax savings has continued.

On 10 September, at the Expert Council, Timur Shinaliev, deputy head of the Federal Tax Service, said that the improper use of a ZPIF is now identified by three interregional inspectorates for the largest taxpayers. They work as industry centres of competence.

So the subject is no longer merely discussed at the level of individual letters from the Federal Tax Service and the Ministry of Finance. A separate control practice is being built around it.

The Federal Tax Service has indicated where it will look:

• the real investment activity of the fund,

• the nature and the timing of the transactions,

• who in fact held control and the economic benefit.

The next stage is a working group with the Bank of Russia and a memorandum with agreed criteria and risk markers. The approaches set out today are to become a more formalised checklist for identifying risky structures.

And here it is worth going back to our earlier study.

We have already examined real transactions for 2025 and shown how real estate used a mutual fund as a short transit link before a sale.

The Federal Tax Service is now in effect naming the signs through which it intends to look at such structures.

Comment by Sergei Pivovarchik, managing partner of Consul Group:

"For about three years we have strongly recommended that clients not use a mutual fund as a transit link in the sale of real estate. And this is far from an exotic structure. In my experience, such a proposal arises in roughly every third large transaction.

So in what is happening now I see not so much a new position of the Federal Tax Service as a quite expected course of events.

The story itself is not new either. We have already travelled much the same path with foreign structures: instead of the Russian real estate, interests in the company that owned it were sold abroad, in the expectation of a different tax result by virtue of the legal form of the transaction. The Federal Tax Service learned to take such chains apart and to look at their economic substance. And in some cases the tax claims against structures of this kind ended not in additional tax assessments, but in criminal cases and the bankruptcy of the business.

With mutual funds the task for the tax authorities is potentially even simpler: the whole structure sits inside Russian infrastructure.

And it is important to understand this. A tax scheme is not a piece of mischief after which, in the worst case, you are asked to pay the extra tax, the interest and a fine, and then sent on your way.

A large arrears may be followed by security measures and enforced recovery and, where there are grounds, by a criminal case and personal liability for specific people.

The person who falls under that risk is by no means always the one who received the main economic benefit. In a real business, one of the first in the risk zone is the general director: a person who may not have been the beneficiary of the structure and may not fully have understood the consequences of decisions proposed by the owners or the consultants.

We see, across a mass of court decisions, how tax savings from a polished presentation turn into blocked assets, criminal cases and years of personal problems for people who, at the time of the deal, thought of it simply as a way to structure the transaction.

That is why we take such a categorical view of transit mutual funds.

All the more so now that it is plain the Federal Tax Service has not "discussed the subject and forgotten it", but is developing it step by step.

First, the positions of the Federal Tax Service and the Ministry of Finance. Now, specialised inspectorates as centres of competence. The next stage, criteria and risk markers drawn up jointly with the Bank of Russia.

At the same time, we have not yet found public tax disputes specifically about such transit structures. It may be that they really have not yet reached the courts. But a tax dispute begins much earlier than court: demands, explanations, audits, a proposal to adjust the tax liabilities.

So it is quite possible that, on particular transactions, such a dialogue is already under way. We simply do not see it yet.

But the main point is already clear. The Federal Tax Service has not lost interest in this structure. On the contrary, it is now building the tools with which it will identify it and assess it.

So if today you are offered, before a sale, to place a property into a mutual fund solely in order to sell the units, or the asset itself but from the mutual fund, and in that way to obtain a tax saving, our recommendation over the past three years has not changed: do not do it."

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