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“I’ll pretend like everything is fine”: Why Pugacheva doesn’t recognize the new album and why she faces increased taxes

- 21.09.2024
“I’ll pretend like everything is fine”: Why Pugacheva doesn’t recognize the new album and why she faces increased taxes

The prima donna celebrated her 75th birthday abroad. A new album with her songs has just been released in Russia, but Pugacheva has already distanced herself from it. She may not want to show her earnings to avoid being subject to special taxes for relocants.

On Monday Alla Pugacheva celebrated her 75th anniversary. It seems that the singer has been preparing for this date since the fall of last year, when she came to Russia for a few days and recorded several new songs in Tver. Then she wrote on social networks: “You will hear about me again.”

Perhaps one of those songs – “Don’t Worry About Me” – appeared on the Internet in early March. And before it, Pugacheva’s album PS appeared, consisting of songs sung at a concert back in 2019.

Cover of Alla Pugacheva's new album PSCover of Alla Pugacheva’s new album PS

Despite the fact that the Diva disowned authorship, almost immediately rumors spread across the Internet with reference to the artist’s entourage: they say that in the first few days after publication the release allegedly earned about 20 million rubles.

Perhaps streaming platforms could pay for the album. For example, on one of the large platforms the rules for posting audio content say the following:

Music tracks and audiobooks are posted and updated on the service based on licensing agreements with their copyright holders automatically“.

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Alla PugachevaAlla Pugacheva

Why is Pugacheva facing increased taxes?

There is a logical explanation why Pugacheva may deny the new album and earnings. The singer has not lived in Russia since the spring of 2022 and, therefore, has lost her tax resident status. At the same time, she did not renounce Russian citizenship and, moreover, is an active individual entrepreneur (IP is the only remaining working business asset of Pugacheva in the country). Thus, according to the residency law, the artist must pay not 13–15% of taxes, like all Russians, but the full 30%.

This is sensitive even for a Prima Donna’s wallet. Perhaps that is why, in response to questions about who is the author of the album and who published it on the Internet, that Alla Pugacheva, that the producer Natella Krapivinadepicted on the cover of the release, like taking water into your mouth. Neither the singer’s entourage nor her husband responded to journalists’ requests. Maxim Galkin.

Alla Pugacheva with her husband Maxim GalkinAlla Pugacheva with her husband Maxim Galkin

According to the law, all foreign commercial activities of the artist are subject to taxation in Russia. If she opened some kind of business, for example in Israel or Cyprus, where she has been seen all the time, she, according to financial experts, will pay taxes “both here and there,” and she will be able to legally avoid double taxation only in in one case – if Pugacheva renounces her Russian citizenship. This has not happened yet.

Big questions also arise from a rumor launched shortly before the singer’s birthday that Pugacheva would celebrate her 75th birthday with a new album and big concerts in Israel, Cyprus and even allegedly go on a tour of Europe. The amount that the artist allegedly asked for a performance in Germany even appeared on the Internet – 50 thousand euros. This is too modest for the Prima Donna, whose fees previously amounted to six figures. In addition, Life.ru did not find any announcements or posters on either Israeli or German sites.

In Israel, local artists make a lot of money from the name of Alla Pugacheva by performing her songs. Tickets for such concerts cost three thousand rubles. It’s funny that in the comments under the posters some users are indignant that for some reason Russian and not Jewish songs are played in the Promised LandIn Israel, local artists make a lot of money from the name of Alla Pugacheva by performing her songs. Tickets for such concerts cost three thousand rubles. It’s funny that in the comments under the posters some users are indignant that for some reason Russian and not Jewish songs are played in the Promised Land

What is left for the Prima Donna in Russia?

In recent years, the singer has consistently withdrawn from her Russian business assets, and today only her individual entrepreneur remains active. It is quite possible that it is not used now, and Pugacheva’s accountant simply publishes “zero” reports, as required by the Federal Tax Service. And in this regard, individual entrepreneurship does not represent any burden for her.

However, the fact that (judging by the Unified State Register of Legal Entities) this individual entrepreneur, unlike other legal entities, has not yet been liquidated, may indirectly indicate that Pugacheva still has opportunities for generating income in the country. And in order to again acquire tax residency in the Russian Federation and pay taxes like all Russians – 13-15% – the singer needs to come to Russia and live here for 183 days.

A significant expense item for the Pugachev-Galkin couple is property taxes. Unlike commerce, here the rate for both residents and non-residents is the same, but fugitive artists pay much more for their property than ordinary Russian citizens, since their property is elite. We are primarily talking about a castle in the village of Gryaz, the cost of which, according to various estimates, could be about 1 billion rubles.

Apparently, Alla Pugacheva is in no hurry to get rid of IPApparently, Alla Pugacheva is in no hurry to get rid of IP

However, if the couple manage to sell it (there have been rumors about attempts to sell the castle for many years now), then they will not have to pay to the treasury for this, since the complex was put into operation back in 2011 – real estate that was owned by more than five years, according to Russian laws it is not subject to tax.

According to Life.ru, Alla Pugacheva currently only has an apartment in the luxurious Filippovsky residential complex in the Old Arbat area. The penthouse area is over 300 square meters, the price is approximately 350 million rubles. If the singer sells the apartment, then, as with the castle, she will not pay anything to the treasury.

Residential complex "Filippovsky"Residential complex “Filippovsky”

Pugacheva, who fled abroad, may try not to pay taxes, but this will definitely backfire. For the next tax period, the property will be subject to a ban on any actions with it. There will be penalties and tax authorities will impose a fine of up to 40% of the debt. If investigators suspect deliberate tax evasion, a criminal case may be initiated. As soon as the stars return to Russia, they will be billed in multiple amounts. They may also face a sentence of up to three years in prison.

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Claire Ramirez