Nil Returns for an LLC and an IE: What to File and When

What a dormant LLC files

• annual financial statements no later than 1 March of the following year; for micro-firms and small enterprises — the balance sheet and the statement of financial results (paras. 7, 10 of Regulation No. 3567);
• tax returns under its regime: turnover tax — a monthly calculation and an annual one by 15 February (Art. 470 of the Tax Code); a VAT payer — a return by the 20th of the following month (Art. 273), profit tax — an annual return by 1 March (Art. 339);
• personal income tax and social tax — if the director is paid a salary (Art. 389, 407);
• property taxes — if the company holds property and land.

What an individual entrepreneur with no income files

• turnover tax returns under Art. 470 of the Tax Code;
• the individual entrepreneur's (IE) social tax — at least one BCV (base calculation value) per month, even with no income (Art. 408).

Liability

For late filing of tax returns, an official of a legal entity is subject to administrative liability (Art. 220 of the Tax Code). A nil return is filed on the same deadlines as an ordinary one.

What "nil" means

Nil reporting means returns with no activity figures, not the absence of returns. The forms are filed in the usual manner and on the usual deadlines.

An important detail: if there has been even one movement on the bank account or a salary has been accrued to the director, the returns are no longer nil, and filing them as such makes them inaccurate.

Risks of not filing

• Penalties for failure to file, charged for each period
• Accumulation of liabilities the company is unaware of
• Problems when resuming business — you have to start by settling debts
• Complications on liquidation: closing a company with unfiled returns is much harder

Which is cheaper

Filing nil returns is the least expensive accounting service. A year of it usually costs less than the penalties for a single missed period, so any saving here almost always turns out to be illusory.