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Resolution of the Constitutional Court of the Russian Federation No. 52-П of 21 July 2026 in the case concerning the review of the constitutionality of Paragraph 1 of Article 394 and Paragraph 15 of Article 396 of the Tax Code of the Russian Federation in connection with the complaint of Corner Kazan Limited Liability Company. The provisions were held inconsistent with the Constitution to the extent that they create uncertainty concerning the application of multipliers to plots designated for individual housing construction and used in business activities.
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Corner Kazan Limited Liability Company owns land plots with the permitted use “for individual housing construction,” located within the boundaries of the municipal formation of the city of Kazan. In calculating the land tax for 2023, the tax authority applied to these plots the 1.5 percent tax rate established by Resolution No. 5-26 of the Kazan City Duma of 11 November 2013 “On Land Tax,” together with multipliers 2 and 4 provided for by Paragraph 15 of Article 396 of the Tax Code of the Russian Federation.
By Decision of the Commercial Court of the Republic of Tatarstan of 11 June 2025 in Case No. А65-42005/2024, which was left unchanged by the rulings of the Eleventh Commercial Court of Appeal of 27 August 2025 and the Commercial Court of the Volga District of 30 October 2025, the claim seeking a declaration that the application of the multipliers was unlawful was dismissed: the courts proceeded on the basis that the multipliers applied even where the tax was calculated at the 1.5 percent rate. By a ruling of a judge of the Supreme Court of the Russian Federation of 13 January 2026, leave to refer the cassation appeal for consideration at a hearing of the Judicial Chamber for Economic Disputes was denied. In its complaint to the Constitutional Court, the company argued that Paragraph 1 of Article 394 and Paragraph 15 of Article 396 of the Tax Code of the Russian Federation contradicted Articles 8, 15 (Part 1), 19 (Parts 1 and 2), and 57 of the Constitution of the Russian Federation because they permitted multipliers 2 and 4 to be applied to the 1.5 percent rate for plots intended for individual housing construction and used in business activities.
The Constitutional Court defined the subject matter of its review taking into account that Paragraph 1 of Article 394 of the Tax Code of the Russian Federation establishes only maximum rates and does not predetermine their specific amount, which is introduced by a municipal legal act. Assessing both the literal meaning of the provisions and the meaning attributed to them by law-enforcement practice (the second paragraph of Article 74 of the Federal Constitutional Law “On the Constitutional Court of the Russian Federation”), the Court reviewed the challenged provisions to the extent that, on their basis, owners of plots acquired or granted for individual housing construction and used in business activities are deemed payers of land tax calculated using the 1.5 percent rate and multipliers 2 and 4.
The Court recalled that a tax may be established only by directly enumerating in the law the material elements of the tax obligation, and that heightened requirements of specificity apply to the introduction of such an element as the rate. The maximum rate of a tax in whose regulation public authorities at another level participate must be determined by federal law and have a restraining effect; these positions also apply to local taxes, including land tax. The federal legislature has broad discretion in choosing tax parameters and may establish different methods for calculating the rate; however, the procedure for calculating the tax is ancillary in significance and cannot be used solely to maximize the tax burden, thereby substituting for the tax rate. The requirement of certainty in tax regulation, arising from the principles of the rule-of-law state, the supremacy of law, and legal equality, applies to all structural elements of a tax obligation; vagueness in a tax provision results in arbitrary and discriminatory application.
Analyzing the history of the regulation, the Court noted that multipliers 2 and 4 were introduced by Federal Law No. 141-ФЗ of 29 November 2004, at a time when the preferential upper limit of 0.3 percent applied without exception to all plots acquired or granted for housing construction, including individual housing construction for business purposes, and the case law of the Judicial Chamber for Economic Disputes of the Supreme Court of the Russian Federation consistently proceeded from that premise. The multipliers were intended to apply to preferential taxation and reflected the consequences of failing to achieve the objectives for which the benefit was granted, thereby encouraging compliance with the stages of housing construction. Under that framework, the tax burden could increase to no more than 0.6 or 1.2 percent of the cadastral value, meaning that it did not exceed the general rate of 1.5 percent, which made it possible to regard the latter as marking the limits of taxation.
Federal Law No. 325-ФЗ of 29 September 2019 excluded plots acquired (provided) for individual housing construction and used in business activities from the scope of the 0.3 percent cap, thereby making it possible to set a rate of up to 1.5 percent for them. The narrowing of the scope of the preferential rate is not in itself constitutionally impermissible, since a tax benefit is not a mandatory element of taxation, and the Court has previously found increased taxation of property used in business activities permissible. At the same time, however, the legislature did not amend the rules governing the multipliers, which had originally been calculated on the basis of the preferential rate; neither the explanatory note nor the discussions of the bill in the State Duma and the Federation Council addressed the possibility or necessity of applying simultaneously a rate of up to 1.5 percent and multipliers of 2 and 4, whereas decisions of this kind require separate justification and cannot pursue the sole aim of generating additional budget revenue.
As a result, two opposing approaches emerged in practice: one, supported by Federal Tax Service Letter No. БС-4-21/14484@ of 16 November 2023 and by a number of commercial cassation courts, permits the simultaneous application of the multipliers and the 1.5 percent rate because the legislature included no express reservation to the contrary; the other considers such application unlawful, relying on the absence of an express statutory provision and on the disproportionate burden, reaching 3 or 6 percent of the cadastral value. The Court noted that the absence of clarification raises doubts as to the justification for the differentiation: owners of plots beneath apartment buildings and blocked-development buildings who also engage in business activities apply a rate of no more than 0.3 percent and experience a lesser fiscal burden. The analogy with transport tax and the mineral extraction tax does not remove the uncertainty, since in those cases the multipliers apply to specifically determined rather than maximum rates and are determined by the economic characteristics of the taxable item, rather than by an incentive to engage in particular economic conduct.
Since interpretation of the provision cannot eliminate the persistent divergences in its interpretation, the proper and, in substance, only possible way of determining the actual content of the regulation, by virtue of the principle of separation of powers, is to clarify the provision legislatively. On that basis, the Constitutional Court held that paragraph 1 of Article 394 and paragraph 15 of Article 396 of the Tax Code of the Russian Federation were inconsistent with the Constitution of the Russian Federation, namely Articles 19 (Parts 1 and 2), 35 (Part 2), 55 (Part 3), 57 and 75 (Part 3), insofar as, within the system of current legal regulation, they give rise to legal uncertainty and contradictory application practice concerning the use of increasing multipliers in calculating land tax in respect of plots acquired (provided) for individual housing construction and used in business activities.
The reasoning relies on legal positions previously developed by the Constitutional Court, including Resolution of the Constitutional Court of the Russian Federation of 31 March 2022 No. 13-П, Resolution of the Constitutional Court of the Russian Federation of 14 February 2024 No. 6-П, Resolution of the Constitutional Court of the Russian Federation of 15 January 2026 No. 1-П, Resolution of the Constitutional Court of the Russian Federation of 22 April 2026 No. 26-П.
The Resolution established a temporary regulatory framework: the increasing multipliers provided for in paragraph 15 of Article 396 of the Tax Code of the Russian Federation may not be applied when calculating land tax in respect of plots intended for individual housing construction, used in business activities and, for that reason, taxed at rates set within the 1.5 percent limit under subparagraph 2 of paragraph 1 of Article 394 of the Tax Code of the Russian Federation. The rule applies from the beginning of a new tax period and remains in force until the federal legislature provides otherwise, taking into account paragraph 6.1 of the reasoning of the Resolution. For the tax authorities, this means abandoning the approach reflected in Federal Tax Service Letter No. БС-4-21/14484@ of 16 November 2023 with respect to this category of plots.
The Resolution has no retroactive effect and applies prospectively. It does not constitute grounds for revising taxpayers’ discharged obligations to pay land tax for tax periods preceding its issuance or for the current tax period. The Court justified this limitation by the fact that the legal uncertainty arose as a result of changes to federal regulation, while the immediate refund of land tax paid would have primarily affected local budgets and could have undermined their stability; the procedure, time limits and specific features of implementing the decision were established on the basis of paragraphs 10.1 and 12 of Part One of Article 75 of the Federal Constitutional Law “On the Constitutional Court of the Russian Federation”.
An exception to the general rule was made for the applicant’s tax obligations and those of taxpayers who sought judicial protection before the Resolution was issued, whose cases or complaints had by that time been filed and/or were pending before or under consideration or examination by the courts, including the highest instance available for this category of case. When considering such cases and complaints, the courts must take into account that all irremovable doubts, contradictions and ambiguities in legislation on taxes and levies are to be interpreted in favour of taxpayers (paragraph 7 of Article 3 of the Tax Code of the Russian Federation). The judicial acts in the case of Korner Kazan LLC are subject to review taking into account paragraph 6.1 of the reasoning and paragraph 2 of the operative part of the Resolution.
The federal legislature was informed of the possibility of amending the current regulation if there is a substantiated need to increase the tax burden imposed on owners of plots intended for individual housing construction and used in business activities. Any such amendments must comply with the rules for introducing new tax regulation set out in Article 5 of the Tax Code of the Russian Federation, based on the requirements of the Constitution of the Russian Federation and taking into account the legal positions of the Constitutional Court. Until the relevant amendments are adopted, the temporary framework established by the Resolution applies.
The relationship between the elements of taxation as formulated by the Court is also significant for practice: the procedure for calculating a tax, including deductions, multipliers and indices, may not substitute for the tax rate or serve solely to increase the fiscal levy. This reasoning applies when assessing other arrangements that combine multipliers with maximum rates of property taxes, as well as when substantiating taxpayers’ arguments that the legislature’s intention must be expressed explicitly and unambiguously and that amendments must be introduced systematically in a manner ensuring predictability and a smooth transition to new tax conditions.
This analysis was prepared on the basis of the CasusLegal database (case law of the highest courts of the Russian Federation). The titles of the cited decisions link to their full texts in CasusLegal.