How a company’s debt becomes personal
Take Pavel. He is the director and owner of 60% of a small wholesale company selling finishing materials, with a warehouse in the Moscow region and around twenty employees. The remaining 40% belongs to his partner Timur, who handles purchasing. The story is a composite, with invented names and figures, but we open similar files regularly.
In early 2023 the tax inspectorate orders a field tax audit for 2020-2022. The claim is as mundane as they come: VAT deductions relating to two suppliers which, it turned out, had neither a warehouse nor drivers. In 2024 the decision takes effect. The company is assessed RUB 38 million in tax arrears, plus around RUB 10 million in late-payment interest and a RUB 7.6 million fine. By then its accounts are almost empty, and the company also owes RUB 20 million to a bank and RUB 8 million to suppliers.
This sum does not land on Pavel by itself. Tax is paid by the organisation, and it cannot be recovered from an individual merely because he signed the tax returns. Personal liability is triggered through a separate mechanism.
The tax authority’s first move usually comes as a surprise: it petitions for the company’s bankruptcy itself.
Why bankrupt a company with nothing to recover
Because bankruptcy proceedings open a lawful route to those who ran the company. The Federal Tax Service may apply to court once 30 days have passed since its decision to recover the debt from the debtor’s funds or property. The minimum threshold for a legal entity is currently RUB 2 million, so in Pavel’s case it is exceeded by a wide margin.
There is a catch that directors remember too late. If the company has become unable to pay its debts, or its assets are insufficient to cover them, the director is obliged to file a bankruptcy petition himself, no later than one month afterwards (Article 9 of the Insolvency Law). If he does not file, he is liable for the obligations that arose after that deadline.
In ordinary commercial dealings, a director has a lifeline here: a supplier who knew about the company’s problems and still shipped goods on credit cannot recover its money from him. With taxes, this argument does not work. Article 61.12 expressly makes an exception for mandatory payments, and the logic is clear: the state budget did not choose its counterparty.
When exactly did that month begin? The date from which a company is considered objectively insolvent is set by the court, and the day the inspectorate’s decision was served is not a binding reference point for it. Right up to the end, Pavel took that very day as his starting point. The trustee calculated differently.
The 50% threshold: how the court calculates it
The cornerstone of subsidiary liability for tax debts is subparagraph 3 of paragraph 2 of Article 61.11 of the same law. If the company has been held liable for a tax offence and the additional assessments exceed half of the principal debt owed to third-priority creditors, the court presumes that the controlling persons drove it into bankruptcy. From that point on, it is no longer for the inspectorate to prove fault, but for the director to prove its absence.
Let us do the sums. Late-payment interest and fines play no part in this arithmetic; only the principal debt is compared: RUB 38 million of tax out of RUB 66 million in the whole register, which also includes the bank and the suppliers. That comes to about 58%, so the presumption applied to Pavel. Had the loan been RUB 20 million larger, the figure would have been 44%.
The calculation must always be done, and courts, frankly, forget this. In December 2023 the Supreme Court of Russia sent a dispute over a director’s subsidiary liability back for a fresh hearing precisely because the court of first instance had established the fact of tax liability but had not checked its share in the register (Ruling No. 305-ES23-11757). The additional assessments there came to RUB 110 million, against a bank claim of around RUB 2 billion.
But 49% is no free pass either. In February 2026 the Supreme Court’s Judicial Chamber for Economic Disputes considered a case in which the Federal Tax Service’s claims fell short of half, and the inspectorate had already written the debt off as irrecoverable (Ruling No. 305-ES22-15047). The lower courts decided there was no one left to pursue. The Supreme Court disagreed: if the presumption does not apply, fault can be proved in the ordinary way, and a write-off does not release those whose conduct made recovery impossible. In that case, more than RUB 210 million had been withdrawn from the company on fictitious grounds.
That ruling also contains a useful caveat for directors. If the debt went unrecovered because of the tax authorities’ own failures, there are no grounds for subsidiary liability.
Incidentally, the presumption attaches to whoever was director at the time of the breach. Had Pavel installed a hired manager in his chair in spring 2024, he would have gained little from it.
No money for the procedure, but a claim all the same
Bankruptcy often ends before it has properly begun: the debtor has nothing, and the court terminates the case. It is tempting to breathe a sigh of relief. But Article 61.19 keeps open a route to the controlling persons outside the bankruptcy case, and the tax authority makes use of it.
In the case of a company from Primorsky Krai, the tax inspectorate lodged claims of only RUB 7.3 million in the bankruptcy, but later pursued the director for RUB 58.4 million. Two lower courts held that no more than the amount claimed could be recovered. In September 2024 the Supreme Court took the opposite view (Ruling No. 303-ES24-3778): since no bankruptcy procedure had been introduced, confirmed claims that had never been part of the case could also be brought. Liquidation or striking the company off the register changes little either. The Plenum has stated plainly that writing off taxes on those grounds does not prevent a later claim for subsidiary liability.
Nor is it time to relax about deadlines. An application may be filed within three years of the moment the applicant learned of the grounds, but no later than three years from the date the debtor was declared bankrupt or the case was terminated, and no later than ten years from the breach itself.
Timur, incidentally, suggested the obvious at the height of the audit: set up a new company and move the clients there along with the warehouse. The Russian Tax Code has Article 45 for exactly this situation. A court may recover the debt assessed in the audit from dependent persons who received the company’s revenue or were given its property after the audit became known. The respondent is usually that very new company, up to the amount it received, so Pavel thought better of moving the warehouse.
Where a director still has room to manoeuvre
The strongest move comes earliest of all, at the audit stage. If the inspectorate’s decision is cancelled or cut back, the presumption has nothing to rest on. There is one month to file objections to the audit report and another month for an appeal to the higher tax authority, and without that appeal the courts will not hear the case. What such a dispute looks like in practice can be seen in our case on overturning an additional tax assessment of RUB 34 million.
If the decision stands, the discussion moves on to fault. The law releases anyone who proves that they acted in good faith and reasonably, in the company’s interests and without harming creditors. And since December 2025 the Plenum of the Supreme Court has said plainly that ordinary business risk is not in itself grounds for liability. In a tax case the question is more down to earth. Who chose these suppliers, and what was checked before the first payment? Pavel signed the contracts, Timur handled procurement, and the working correspondence shows it.
Fine, but what about Timur himself? A 40% stake does not automatically make him a controlling person: the presumption starts at ownership of more than half. But the court may recognise as such anyone who actually determined the company’s actions. Such persons are jointly and severally liable, meaning the whole amount can be claimed from whichever of them has assets to take.
The amount is a separate front. It equals everything left unpaid, not just the taxes, so Pavel may also be pursued for the RUB 28 million owed to the bank and suppliers. The court will reduce the sum if the harm proves significantly smaller, and the Plenum now allows a director to prove that particular claims could not have been caused by the breach. Fines were taken out of the equation by the Constitutional Court back in 2023 (Resolution No. 50-P): the RUB 7.6 million cannot be recovered from Pavel, whereas the tax arrears and late-payment interest remain.
And one more recent trap. A controlling person who took no part in forming the register will, as a rule, be unable to argue later that claims were wrongly included in it.
What will change, and when to see a lawyer
In July 2026 Federal Law No. 253-FZ reforming bankruptcy was signed. Most of it takes effect only on 27 July 2027: debt restructuring will become available to companies, and the wording of Article 9 will change. The amendments to Article 61.11 affect other sub-paragraphs; the tax presumption stays as it is.
Talking to a lawyer costs least when all you have is the audit report, or better still, the decision ordering the audit. Later is not too late either: defence against subsidiary liability for tax debts also covers the stage when the application is already in court; there are simply fewer moves left. In one of our cases the court rejected a RUB 120 million claim after the company had already been liquidated, and we describe it in a separate case study. We agree the plan and the fee in writing before we begin.
Frequently asked questions
Can the tax authority recover a company’s debts from the director without bankruptcy?+
Not simply because he is the director. But if the bankruptcy case was terminated for lack of funds for the procedure, or the Federal Tax Service’s petition was returned, the tax authority may bring a claim against the controlling persons outside the bankruptcy case.
How is the 50% threshold calculated?+
The principal debt under the additional tax assessments is compared with the principal debt owed to all third-priority creditors in the register. Late-payment interest and fines are not counted.
Are tax fines included in subsidiary liability?+
No. This follows from Constitutional Court Resolution No. 50-P and the guidance of the Plenum of the Supreme Court. Tax arrears and late-payment interest are included in the amount.
Need an assessment of your situation?+
Leave a request: a tax disputes and bankruptcy lawyer will review the audit report, the register of creditors’ claims and the company’s documents and tell you which move matters most right now.