Katyrin urges safeguards against repeated recovery in paper VAT cases

Russian Chamber of Commerce and Industry president Sergei Katyrin proposed preventing the same budget loss from being recovered repeatedly from different businesses in a supply chain in paper VAT cases. He spoke at the chamber's national tax forum, RBC reported.

Paper VAT schemes use fictitious transactions and documents to obtain unjustified tax deductions. Katyrin said enforcement could also affect legitimate businesses, including companies that had not dealt directly with the offending entity.

The chamber chief urged a distinction between insufficient care in selecting a counterparty and proven intentional participation in tax evasion. He said a VAT gap did not itself establish that a buyer knew about a supplier's violations, including those at the fourth or fifth link in a chain.

Katyrin called for joint work with the Federal Tax Service to improve enforcement, examine each participant's conduct and account for the actual budget loss. Requests sent to several businesses required extensive paperwork and increased administrative costs, he said.

In July, deputy tax service head Timur Shinaliev said businesses receiving enquiries should provide documents establishing that transactions with their immediate counterparties were real. A supplier having staff and assets did not itself rule out tax claims, since business activity could still be simulated.

In spring 2026, tax and law enforcement authorities reported uncovering a network of more than 4.8 thousand connected companies. Tax officials said documents for fictitious deductions worth 1.2 trillion roubles had been prepared through it in 2023–2025.

Hundreds of alleged clients were subsequently summoned to tax offices. Participants in a meeting told RBC that businesses were asked to amend returns and pay additional tax or prepare for inspections and possible criminal proceedings.