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12 November 2020

The Head of organization is not responsible for errors of the internal counterparty verification service.


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When reviewing case on bringing the Head of a bankrupt company to liability, the question arose that verification of counterparties was assigned to a specially created company service, the conclusion of which was guided by the General Director.

The head of an organization is not obliged to bear civil liability for any tax offense committed by a legal entity. Amount of losses should be compared to the scale of the manager's activities, depth and importance of the tasks he/she is solving on the whole for the existence, functioning and development of the organization he/she controls.

Court indicated that the Head of organization must ensure that counterparty verification process is carried out as efficiently as possible. If audit does not reveal any risks, this risk is considered commercial and not as bad faith actions of the Head.

Source: Decision of the Supreme Court of the Russian Federation of 08/05/2020 N 305-ES19-8151 (4) for case N A40-165388/2017



Changes in tax policy of Russian Federation from 2021: agreements on avoidance of double taxation (DTA) and personal income tax.



On March 25 this year, Russian President Vladimir Putin in one of his addresses to the nation announced the need to revise the state policy in relation to tax benefits related to tax on dividends. In particular, were announced changes related to avoidance of double taxation of dividends tax rates when paying dividends abroad. First of all, this had to be done with countries "through which significant resources of Russian origin pass"1.

Now by November 2020 Russian Federation managed to revise some agreements on avoidance of double taxation: for example, protocols to agreements with such jurisdictions as Cyprus, Malta and Luxembourg have already been signed. Also, RF Government is currently actively discussing proposals to amend agreements with Switzerland and Hong Kong2.

Changes are related to increase of dividend income tax rates up to 15%. However, some exceptions to this rule will continue to apply: for example, preferential tax rate of 5% will apply to institutional investments and public companies with at least 15% of shares in free circulation and holding at least 15% of capital of a company that pays specified income during the year, as well as for some categories of insurance companies. There are other exemptions that are not subject to the new rules.

Changes that were included in respective protocols signed by the parties must be ratified by the end of this year, so according to government representatives they can begin to be applied from January 1, 2021.

In connection with the current changes in tax policy business response may follow: development and implementation of necessary structural changes related to corporate structure of companies and review of management procedure of holding companies.

Source: "Россия и Люксембург договорились изменить налоговое соглашение" // Издание "Парламентская газета"

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1 "Will Putin's anti-crisis program help the Russian economy survive?" // РБК;
2 "Russia and Luxembourg signed a protocol on changing the tax agreement "// IA" Finmarket".



Criteria for bringing to subsidiary liability in bankruptcy have been clarified.



The Supreme Court reviewed case of prosecuting directors of a company believing that bankruptcy was caused by their actions in relation to transaction to contribute to share capital of a third party. In the process of considering the dispute, Court established the criteria that must be followed in assessing circumstances of such cases.

In determining whether the behavior of defendants resulted in bankruptcy of the debtor the following should be taken into account:

1. defendant's ability to significantly influence the debtor's activities (which, for example, excludes ordinary employees, middle-level management, minority shareholders, etc. from the circle of potential defendants provided that formal status of these persons corresponds to their role and actual functions);

2. implementation of relevant powers by defendant has led (is leading) to negative consequences for the debtor and his creditors; scale of negative consequences correlates with the scale of the debtor's activity, that is, it is capable of drastically changing structure of his property into a qualitatively different - bankrupt-state (however, they cannot be recognized as grounds for subsidiary liability of actions, although not profitable, but insignificant in their size and consequences for the debtor of transaction);

3. defendant is the initiator of such behavior and (or) is a potential beneficiary of negative consequences arising in connection with this (hereinafter - the criteria; paragraphs 3, 16, 21, 23 of Resolution N 53).

Thus, defendants now have more tools to protect themselves from subsidiary liability.

Source: Decision of the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation dated June 22, 2020 for case N 307-ES19-18723(2,3), A56-26451/2016



Review of news on labor law.



Court upheld dismissal of employee on his last day of probation period which fell on his day off.

Employee challenged his dismissal for failing during probation period. Among other things, he referred to the fact that he had a shift working schedule and employment contract was terminated on his day off.

Court of cassation saw no violations. The law does not prohibit dismissal of an employee on his/her day off if probation period expires on that day. Days off of an employee and organization itself may not coincide. Nothing prevented an employer from terminating employment contract on the last day of his probation period.

Judicial practice: Decision of the First General Jurisdiction Court of Cassation dated 09.21.2020 for case N 88-18936/2020


Employer has to offer its employees transfer to part-time jobs during downsizing.

Decision of the Second General Jurisdiction Court of Cassation dated July 23, 2020 N 88-11740/2020 determined that employer has to offer its employees transfer to part-time jobs during downsizing.

During downsizing of organization it had part-time job openings and a new employee was hired to fill one of them at that time. The employee was not offered them until she was fired. She appealed to court.

The dispute reached cassation instance. She pointed out that part-time rates are considered job openings and should be offered upon job displacement. Employer did not comply and did not prove that the employee's qualifications were not suitable for transfer to these positions.


Employee can be dismissed for failure to undergo medical examination.

Employee of a medical organization was sent for an extraordinary psychiatric examination to determine his fitness for work by his employer. Employee did not fulfill this requirement and was given a warning. When employee refused to go to the doctor for the second time, he was reprimanded. The third time he was fired for repeated failure to fulfill his duties. Employee challenged the organization's actions.

Courts including court of appeal sided with the employer. The employee belonged to those obliged to undergo a medical examination1. He did not fulfill the requirements of the organization, which means he violated labor discipline. The dismissal is legal.

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1 Art. 213 of the Labor Code of the Russian Federation. Employees of food industry organizations, public catering and trade, water supply facilities, medical organizations and children's institutions as well as some other employers undergo these medical examinations in order to protect public health, prevent occurrence and spread of diseases.

Judicial practice:
Decision of the Ninth General Jurisdiction Court of Cassation dated 09.24.2020 N 88-6775/2020
Decision of the First General Jurisdiction Court of Cassation dated January 20, 2020 for case No. 88-1207/2020


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