Dormant accounts: preparation and submission
By law, companies must file reports with the tax authorities and other supervisory bodies as soon as their registration is confirmed by the state. If the company did not operate in a given financial quarter, it is required to submit dormant company accounts (it is from these accounts that the Tax Inspectorate finds out about the absence of commercial activity).
We suggest you outsource the routine work (reporting, filling in forms, submission) to us, avoiding information overload. Our employees’ dormant accounts are always flawless. We can also help you to avoid any issues in submitting reports for an inactive individual entrepreneur (Russian: IP).
Below, read what declarations are required for inactive LLCs (Russian: OOO) and how dormant accounts are drawn up for LLCs and individual entrepreneurs.
- up to 12 types of reports on 50 pages
(you don’t believe us? More here)
- 39 signatures
- 15 stamps
- All of this in duplicate.
- every year, the deadlines for submitting dormant accounts to the Russian Pension Fund, Federal Tax Service Inspectorate, Social Insurance Fund and Russian Statistical Office change
- 2-3 times per year, there are changes to the contact details for filing the reports
- almost every quarter, the forms change
How much does zero reporting cost?
We offer two options for your dormant accounts. Your choice depends on your preferences and financial means.
(the indispensable minimum)
- We prepare the reports
- We tell you how and where to submit the reports (relevant contact details)
- we prepare the reports
- we go to the post office on your behalf and send off your zero reports to the Russian Pension Fund, Federal Tax Service Inspectorate, Social Insurance Fund, Russian Statistical Office by registered mail and with a list of enclosed items
- we provide you with scans of the enclosure list and the shipment receipt (you can pick up the originals in our office)
Any discounts on zero reporting?
50 %if your company has been registered in the current financial quarter
20 %if you apply the simplified tax system (Russian: USN)
10 %if you order several sets of statements together (for several legal entities or for several periods)
5 %if you are an existing zero reporting client
your first “zero report” for just 750 roubles
This special price applies to newly created companies during the first quarter of registration.Take advantage of our special offer
Found it cheaper?
Call several companies that offer zero reporting at low prices. Most of them charge a price that is a multiple of the one advertised. In the end, this “cheap” dormant accounts turn out to be a lot more expensive than what you were expecting at first.
Additional costs involved:
- Submission of reports to the Pension Fund and Social Insurance Fund: on average, 500 roubles per report
- Reports to the Russian Statistical Office: on average, 100 roubles.
- Confirmation of the principal activity to the Social Insurance Fund: on average, 500 roubles
- Sending off reports by mail: on average, 350 roubles per report
- Help in requesting documents required to fill out declarations: on average, 300 roubles per document
We do all your reporting at the quoted price, without extra charges.
What is included in your
set of statements?
The set of declarations required for zero reporting depends on the legal form and the chosen taxation system. For instance, inactive LLCs subject to the general taxation system (Russian: OSNO) must submit up to 30 reports per year: 6 quarterly and 12 annual reports. Under the simplified taxation system (Russian: USN), 23 documents must be filed. For an IP, just 1 report per year is needed.
|Type of report||Where reports are submitted||Quarterly reporting (1,2,3)||Annual reporting|
|LLC (OOO), JSC (AO), non-commercial organizations (NKO), foreign companies||Individual entrepreneur (IP)||LLC (OOO), JSC (AO), non-commercial organizations (NKO), foreign companies||Individual entrepreneur (IP)|
|VAT return||Federal Tax Service||Necessary||Necessary||Necessary||Necessary|
|Corporate income tax return||Federal Tax Service||Necessary||Necessary|
|Tax return||Federal Tax Service||Necessary||Necessary|
|Report on the average number of workers||Federal Tax Service||Necessary||Necessary|
|Financial accounts (annual report on the activity of a foreign company)||Federal Tax Service||Necessary||Necessary|
|Form RSV-1||Russian Pension Fund||Necessary||Necessary||Necessary||Necessary|
|Letter confirming dormant status||Russian Pension Fund||Necessary||Necessary||Necessary||Necessary|
|Form 4-FSS||Social Insurance Fund||Necessary||Necessary||Necessary||Necessary|
|Letter confirming dormant status||Social Insurance Fund||Necessary||Necessary|
|Confirmation of principal economic activity||Social Insurance Fund||Necessary||Necessary|
|Financial accounts||Russian Statistical Office||Necessary||Necessary|
|Notification of continued activity||Ministry of Justice||Only for NKOs|
|Total number of reports in the set||6||4||1||0||11-12||10-11||1||1|
3 compelling reasons
- If you pay for our zero reporting service through the website, we see the incoming payment immediately and are on your case straight away.
- In urgent cases, we can prepare the set of documents in as little as two hours (although it is obviously better to contact us earlier).
- All you need to do is indicate your INN; we find all the remaining information ourselves.
- You don’t need to check what tax inspectorate and what address the declarations must be submitted to – we check on your behalf
- The final zero reporting price is published on our website. You can pay for our services by card, online.
- We reliably remind you of the deadlines for the next reporting period
- Our accountants prepare over 200 dormant accounts per quarter and know the process inside out
- We track all legislative changes: this is why our accounts are always flawless
- We regularly update all contact details for the submission of reports (for this, we have a designated member of staff); your accounts always go to the correct address
- no longer have to worry about your tax returns; instead, someone passionate about accounting will devote all their time to them.
- put the onus on us to accurately prepare and reliably submit your dormant accounts. This includes financial liability.
- can rest assured that your obligations to the tax authorities are met in full and on time.
If that’s not attractive, what is? =)
What happens if you fail to submit your
Many erroneously believe that in the absence of transactions and cash flows on the current account, no dormant accounts and no other declarations must be submitted. We would like to warn you about the following risks and consequences:
- Current account freeze
- Managing director gets fined
- Company gets fined
If the tax office does not receive your tax returns on time (regardless of whether the company is inactive or not) your current account may get blocked in as little as 10 working days. The inspectors send a notification to your bank and your legal address.
If a delay arises in forwarding the letter from the legal address, you might only find out that your account has been frozen once your bank refuses to execute your instructions.
To unfreeze the account, the tax service requires the managing director to come in for a chat. After that, a fine from 300 to 500 roubles is imposed. The fines are not huge, of course, but you need to spend substantial amounts of time on visits to the tax office and bank.
Companies that fail to submit dormant accounts are subject to 1,000-rouble fines for each declaration. Again, it is not about money, but that the company is unable to operate. Again, you need to spend time on unfreezing the account.
To unfreeze the account as soon as possible, you may have to approach friends or acquaintances from the tax office. This costs time and money.
Frequent questions on dormant accounts
When must a newly founded company submit its first set of dormant accounts?
The first accounts must be submitted for the quarter of registration. For instance, if you have registered the firm on 20th March, you must file your first dormant accounts for the first quarter. Note that even in those cases where companies were registered on the last day of the quarter, dormant accounts must nevertheless be provided.
Check the registration date on your incorporation certificate. This is the date when your company formally began operations. Even if you did not, in fact, start to operate, the tax service, Pension Fund, Social Insurance Fund and Russian Statistical Office are already waiting for your declarations.
Must dormant accounts be submitted if the current account is not open yet?
- As of the nearest reporting date after registration, you must provide your accounts. Whether you have opened a current account or not does not matter. By the way, many companies work without a current account – they only use only a cash register. Thus, the absence of a current account is irrelevant to the question whether declarations must be submitted.
Who must submit dormant accounts in electronic format?
From 2014, companies and individual entrepreneurs under the general taxation regime may file VAT returns in electronic format only, and only through telecommunications channels. Failing that, submission is not acknowledged and the taxpayer is subject to fines or account freezes.
However, in the absence of current account activity, a single (simplified) tax return can be submitted in paper form (not to be confused with the tax return under the simplified USN system). The single declaration replaces the corporate income tax and VAT returns. Only inactive companies, i.e. with dormant accounts, can file simplified declarations.
Important! You can only file a single (simplified) tax return on paper if you are a 100% certain there were no cash flows on the current account. If, for instance, the bank has charged commission, you must definitely file an electronic VAT return.
Once the inspectors get the paper declaration, they send an information request to the bank. If there have, in fact, been movements on the account, a fine is imposed and the account may be frozen. Therefore, if you are subject to the general taxation regime, it is safer to submit electronic reports to the Federal Tax Service Inspectorate straight away.
Is the company dormant if the bank has charged commission?
Often, a current account is already open and the bank charges commission. Consequently, the company is no longer dormant, and you must choose one of the following solutions, i.e. either
to expense bank charges: In this case, the company is no longer considered inactive despite the absence of quarterly income. Your tax declaration and financial accounts show a loss.
not to expense bank charges: You have the right not to include bank charges in your accounts.
In that case, you can submit dormant accounts and need not explain your losses to the taxman. In addition, filing dormant accounts through us is cheaper.
Won’t the tax service ask why there was no activity?
For the tax inspectorate, it is more important that the tax returns were filed in full. Whether the company is dormant or not does not matter.
If the company is registered and does not file any accounts, this may result in:
- current account freezes;
- the managing director being summoned to the tax inspectorate;
- fines imposed on the company and the managing director personally.
What if we have missed several deadlines already?
- Here, the risks and consequences are the same as with an initial failure to submit dormant accounts. However, with every set of accounts not submitted, fines multiply by the number of missed periods. It is best to address the issue quickly, especially since there is a discount for ordering several sets.
How can we file dormant accounts ourselves?
You can choose from the following two options.
By mail, with a list of enclosures. We put together all the declarations for you. All you need to do is print them, sign them and send them off by mail from the nearest Russian post office.
We send you the list of enclosures by e-mail together with the declarations themselves. It includes a complete list of declarations and also the address where your dormant accounts must be sent to.
Please note! The postal workers must stamp the enclosure list as shown. The stamp includes information on the dispatch date. This is considered the date of submission. You must retain the enclosure list together with your duplicates for at least 5 years.
This method has one disadvantage. The post office might not deliver the documents on time. However, the enclosure list and postal mark prove that any allegations of late submission are unfounded.
Another suggestion: other than the enclosure list you can send off the accounts with a delivery confirmation. You can get the form in a post office as shown.
The delivery confirmation means that your letter is personally handed to the recipient (employees at the relevant government bodies) and signed for. This signed confirmation is then returned to you: indisputable proof that the officials have received your set of dormant accounts.
Hand it to the tax inspector personally. If you choose this method, you or a representative must go to the tax inspectorate to submit the dormant company accounts.
If you submit the accounts for a legal entity, anyone can be its representative. A simple power of attorney from the managing director is enough. However, representatives of individual entrepreneurs require a notarised power of attorney.
The advantage of this approach is that you can be sure the dormant accounts have been accepted. Your copy will be stamped in confirmation.
The disadvantage, on the other hand, is that you need to spend a lot of time travelling to the tax office and queuing there.
If you prefer not to go anywhere or send anything off, choose the “Comfort” package, where we submit your dormant accounts ourselves.
Opening a company: useful advice
How quickly must a new company open a current account?
The firm needs a current account for settlements with counterparties and also to pay taxes. If the company is registered but not yet planning any activity, we would advise you to take your time in opening the account. This allows you to save time and money on the notary and commissions.
How to choose a bank and current account?
These days, it is difficult to suggest any particular bank. Many choose a bank because relatives, friends, acquaintances, etc. work there: due to personal connections. However, in our view, it is important to pay attention to the following aspects:
- if you are happy with the bank charges;
- if the bank offers online banking and if you are happy with its price;
- how close the bank branch is to your office. Is it convenient to go there to sign documents, drop off payment instructions or pick up the statements of account in the original?
- is the bank reliable (based on external sources)?
On the www.banki.ru website, you can find the bank’s rating.
What to do if the company is not located at its legal address?
All government bodies send their postal correspondence to the legal address indicated in the registration documents.
If your company is located elsewhere, letters to that address arrive late or not at all. In such cases, the managing director may only find out about looming problems when it is too late.
Sometimes letters are simply returned to sender. This might make the authorities block your current account until the managing director visits them and explains them why it was impossible to contact him at that address. Next, the tax office demands a change of legal address.
We would like to warn you: all purchased legal addresses are “mass registration” addresses. You need to pay stamp duty again, buy a new address and register it in turn.
When incorporating the company, you can indicate the managing director’s address of permanent registration. It is now easy to use such addresses.
What taxation system should we choose?
Generally speaking, we can answer this question as follows: those who work with corporate customers are better off using the general taxation system. This is required so that you can issue VAT invoices to your clients. In this case, buyers can deduct VAT.
The simplified taxation system is attractive to those companies which work directly with consumers or other counterparties subject to special taxation regimes (simplified, single tax on imputed income, patent taxation system).
Of course, the choice of taxation regime is not that simple. Much depends on the specific profile of your business.
The choice, within the simplified tax system, between a 6% tax rate on revenue or 15% on profit also depends on many factors.
You can discuss the choice of taxation system with our tax consultants. They will help you choose the taxation system that is ideal for you.
Can I spend the paid-in capital?
Yes, you can and should spend the paid-in capital. This sum is needed to pay the company’s expenses in developing the business before it generates any revenue.
Important! Do not forget to pay in the capital within four months of the incorporation date, or the tax service might liquidate the company.