Business tax surcharges amplified by one-third in the year 2025
### Tax Inspections and Assessments in Russia: Q1 2025 Overview
Russia has seen an increase in tax inspections and assessments during the first quarter of 2025, according to recent developments. Vice-Premier Grigorenko recently announced a decrease in business inspections, but the focus on fiscal scrutiny has shifted towards sectors such as agriculture, export-oriented industries, and small and medium-sized enterprises (SMEs).
The sectors most likely to be affected by these increased inspections include agriculture, where ongoing export challenges and tax hikes have led to heavy fiscal scrutiny. Export-oriented industries are also under close monitoring due to fluctuations in export taxes and quotas. SMEs, which often face compliance issues due to limited resources, are also a target for increased inspections.
Common violations observed include underreporting income or sales, incorrect VAT or export duty declarations, non-compliance with digital reporting requirements, and delayed tax payments and reporting.
The financial strain on SMEs, particularly in the agricultural sector, is significant. Higher inspection rates coupled with tax hikes exacerbate cash flow challenges, potentially squeezing margins to low levels. Compliance costs also increase as SMEs invest in upgrading IT systems and strengthening internal tax teams to meet rigorous digital and reporting standards. Operational disruptions may also occur due to frequent inspections and audits, which can divert management attention from core business activities.
Despite the challenges, businesses are advised to bolster tax compliance, invest in digital reporting capabilities, and prepare for stringent audits and assessments. For more granular details or official statistical data, monitoring announcements from the Russian Federal Tax Service or chambers of commerce would provide targeted insights.
The Federal Tax Service conducted 12,000 inspections in Q1 2025, similar to the number in the same period of 2024. However, claims against individuals doubled to 604 million rubles in 2025, and the main volume of arrears was found in organizations, although data on their industry affiliation is not available.
Starting this year, authorities have implemented an amnesty for the most common violation - splitting - offering automatic waiver of taxes, fines, and penalties for 2022-2024 for businesses that voluntarily stop using illegal schemes. Tightening tax controls pose a significant challenge for small and medium-sized businesses, especially due to high costs, weak demand, rising production costs, and strict central bank policies. The profit tax rate was increased from 20 to 25%, and a progressive scale was introduced for PIT in 2025. Small companies on the "simplified" system with a turnover of more than 60 million now have to pay VAT in 2025.
The increased inspections and assessments by the Federal Tax Service are not only focusing on sectors like agriculture, export-oriented industries, and small and medium-sized enterprises (SMEs), but are also causing a significant financial strain on SMEs, particularly in the agricultural sector, due to higher inspection rates, tax hikes, and increased compliance costs.
As a result of these tax controls, small and medium-sized businesses are facing a major challenge, especially due to high costs, weak demand, rising production costs, and strict central bank policies, making it crucial for businesses to bolster tax compliance and invest in digital reporting capabilities to meet the rigorous new standards.
