Business fragmentation: when is it justified in the construction industry?

Abstract: The Ministry of Finance of the Russian Federation has developed a draft law on tax amnesty for business fragmentation. All the violations for 2022–2024 will be forgiven in exchange for good behavior in 2025–2026. This document is still being improved in the State Duma. At that, business representatives think that it will still remain evaluative, because the Federal Taxation Service considers that the possession of more than one company by one owner may indicate tax evasion. Therefore, when creating several enterprises, the owner must be ready to defend his or her position in the Federal Taxation Service. The editorial staff of the “Geoinfo” journal asked some entrepreneurs about why they divided or did not divide their businesses, and asked a tax consultant how to work correctly in such cases.

Keywords: business fragmentation; business fragmentation criteria; tax burden; tax evasion; tax amnesty; business consolidation.