On 25 November 2025, the Constitutional Court of the Russian Federation has proclaimed the Judgement № 41-П in the case on the review of the constitutionality of Article 424 (items 1 and 2) of the Civil Code of the Russian Federation, Article 168 (item 1) of the Tax Code of the Russian Federation and Article 1 (sub-item “a” of item 1) of the Federal Law “On Amendments to Part Two of the Tax Code of the Russian Federation”. The hearing in connection with the complaint of PAO (PAO similar to PJSC) “Bank VTB” took place on 7 October 2025.Factual background
In 2019, AO “Envision Group” (later AO “Sitronics IT”) and Bank “VTB” signed a contract providing the latter, under a simple license, the right to use Microsoft computer programs for three license periods in 2020, 2021 and 2022. The contract was concluded at auction in accordance with the legislation. The remuneration for the entire period amounted to more than 2 billion rubles, and the applicant was obligated to make payments for each license period. At the time of the conclusion of this contract, the provision of exclusive rights to the software on the basis of a license (sublicense) contract was not subject to VAT, which was reflected in clause 2.1 of this contract.
Since 1 January 2021, in connection with the entry into force of Federal Law No. 265–FZ, VAT has been imposed on operations granting exclusive rights to software that is not included in the unified register of Russian computer programs and databases. Since Microsoft software was not included in it, “Sitronics IT”, being a VAT payer for the license period of 2021, presented the amount of tax to the Bank, in addition to the price specified in the contract. The Company filed a lawsuit with the court to recover arrears in payment of remuneration additional to the contract price for the second license period of software use in the amount of 141,353,528 rubles and penalties in the amount of 7,067,676 rubles.
The Arbitration Court of the city of Moscow refused the claims of Sitronics IT, but the Court of Appeal overturned this decision, satisfying the claim. The Intellectual Property Court, having considered the cassation appeal of Bank “VTB”, overturned the decision of the Court of Appeal and upheld the decision of the court of first instance.
By the decision of the Supreme Court of the Russian Federation, the judicial acts of the first and cassation instances were annulled, and the decision of the Court of Appeal remained in force.
Position of the applicant
According to the applicant, the contested provisions do not comply with the Articles 1 (part 1), 4 (part 2), 5, 8, 10, 11, 15 (parts 1 and 2), 19 (part 1), 34, 35 (parts 1 and 2), 55 (part 3), 57, 104 (part 3) and 105 (part 1) of the Constitution of the Russian Federation. The complaint states that, as interpreted by law enforcement practice, these provisions mean that the cancellation of the VAT exemption for operations involving the exercise of exclusive rights to foreign software in an increase to the price of a previously concluded contract. This increase is for the amount of VAT effective 1 January 2021, and occurs without the consent of the customer, who does not accept VAT for deduction.
Position of the Court
Freedom of contract in the economic field is not absolute and may be limited by constitutional provisions (Article 55 (part 3) of the Constitution). Parties to a contract are free to agree on its price, which implies their acceptance of the risks associated with a specific economic activity.
When legislation changes, it is especially important to adequately guarantee the legal status of the parties to ongoing legal relationships and provide them with opportunities to adapt to the new regulatory framework. In the event of significant changes to tax legislation, the absence of adaptation mechanisms risks violating constitutional principles.
The Tax Code of the Russian Federation does not contain provisions regarding the consequences of a change in tax legislation that would obligate the seller to pay VAT when performing an ongoing contract. Nor do the transitional provisions of the contested Federal Law No. 265-ФЗ establish a regulatory framework for adaptation.
Although the legal provisions challenged in this case cannot be considered unconstitutional in themselves, their combined application in resolving disputes related to a seller’s attempt to change the terms of a previously concluded ongoing contract reveals a constitutional gap and requires an adequate (regulatory) response.
The automatic collection by the seller of additional compensation equal to the VAT amount added to the contract price, not agreed upon by the parties, may lead to the seller’s unjust enrichment at the buyer’s expense. Furthermore, in the absence of a risk of such enrichment, it will also fail to achieve the primary purpose of such mechanisms, which serves to balance the rights and interests of the parties to the contract in circumstances where adherence to its original provisions is unable to ensure such a balance, including achieving proportional equality between the parties, particularly in the absence of the buyer’s right to a VAT deduction.
Therefore, the contested legal provisions, taken together, are inconsistent with the Constitution. Due to their omission regarding the resolution of the issue of adjusting the price of an ongoing contract (or terminating it) due to changes in tax law after its conclusion, which result in the seller being obligated to pay VAT when performing the contract, they allow the seller to collect additional compensation to offset the consequences of these legislative changes from the buyer, who is unable to deduct the corresponding tax amounts to compensate for the expenses passed on to them.
The legislator should address the legal gap identified in this Judgement, which affects a wide range of civil law relations arising from ongoing contracts when tax law changes after their conclusion.
Prior to that, if the parties in a given situation had failed to reach an agreement on adjusting the price of an ongoing contract or terminating it, then:
the seller has the right to file a lawsuit demanding a price increase equal to half the tax amount payable to the budget for the relevant contract if continued performance of it deprives him of what he was entitled to expect at the conclusion of contract, including resulting in property expenses, and the buyer, who is not entitled to a tax deduction, has refused to amend or terminate the contract;
the price agreed in such contract with an individual cannot be changed, except in cases where the individual is performing entrepreneurial activity when concluding and executing the contract;
the issue of price increases related to the procurement of goods, works, and services for state and municipal needs is resolved taking into account the specifics established by the legislation on the contract system in such field.
The applicant’s case is subject to review.
Presiding Judge Valery Dmitrievich ZORKIN
Judge Rapporteur Luydmila Mikhailovna ZHARKOVA