Sergey Tarasevich has commented for Mashnews on the blocking of accounts of a major timber processor due to tax and fee arrears

The Federal Tax Service sent a decision to suspend operations on the accounts of a major timber processor, ULK Group, to Primtercombank, branches of Rosselkhozbank, Uralsib Bank, Raiffeisenbank and Alfa Bank. The company’s tax and levy debt of ULK Group for the fourth quarter of 2024 amounted to RUB 416 mn, including RUB 414 mn in VAT arrears. At the same time, the revenue of ULK Group for 2023 was RUB 17.5 bn, the loss – RUB 7 bn.

‘In the case of a complete blocking of the account actually paralyses the company’s activity, from the blocked accounts it is impossible to make payment in favour of the counterparty,’ Sergei Tarasevich, Senior Associate of Tax & Administrative Law Practice at Maxima Legal, explained to Mashnews. In this regard, according to the expert, blocking accounts is, on the one hand, an effective measure to incentivise taxpayers to pay tax or submit declarations (statements), on the other hand, tax authorities periodically abuse the possibility to block accounts.

‘In this situation, non-payment of VAT indicates that the company at the moment, most likely, does not have free cash to repay debts to the budget. Whether this problem is temporary or systematic, it is difficult to say,’ Sergey Tarasevich said.

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