If you win a car, do you have to pay tax?

Won and sold a car - pay personal income tax twice

The Ministry of Finance of Russia, in a letter dated May 16, 2011 No. 03-04-05/6-351, explained that income received as a prize when participating in a promotion is subject to personal income tax at a rate of 35%, and income from its sale at a rate of 13% . These are different types of income, which means there is no double taxation. Note that the position of the financial department is fully consistent with the norms of tax legislation.

Nowadays, many companies operating in the market for various services attract the attention of potential customers with the help of promotions. Cellular operators are no exception. Recently, one lucky owner of a mobile phone won a car in a promotion held by an operator company. This also happens... One problem: the newly minted motorist did not have the cash to pay personal income tax at a rate of 35%. Then he decided to sell the car he won. But you also have to pay tax on the income from its sale. Will there be double taxation when paying personal income tax on both winnings and income from the sale of a car? Having doubts and not wanting to in any way break the law and come into conflict with the tax authorities, the citizen turned to the Russian Ministry of Finance with a question about the taxation of income from the sale of a car received as a prize during participation in an advertising campaign.

Financiers indicated that when determining the tax base for personal income tax, all income of the taxpayer that is received both in cash and in kind or the right to dispose of which he has acquired is taken into account (Article 210 of the Tax Code of the Russian Federation).

The cost of the car won during the promotion, in part exceeding 4,000 rubles. is subject to personal income tax at a rate of 35% (clause 2 of article 224 and clause 28 of article 217 of the Tax Code of the Russian Federation). And income received by a citizen from the sale of property owned by him, as a general rule, is subject to personal income tax at a rate of 13%.

Since the car was owned by the taxpayer for less than three years, the latter has the right to a property deduction in the amount received from the sale of the car, but not exceeding a total of 250,000 rubles. (Subclause 1, Clause 1, Article 220 of the Tax Code of the Russian Federation).

The Russian Ministry of Finance clarified that income in the form of the value of a prize received through participation in a promotion and income from the sale of this prize are different types of income. And no double taxation of the same income arises in this case.

In addition, financiers recalled that, taking into account the provisions of Art. 228 and 229 of the Tax Code of the Russian Federation, a citizen must submit a personal income tax return to the tax authority at the place of residence no later than April 30 of the year following the year in which income in the form of the value of the prize and income from the sale of the car was received. The amount of personal income tax calculated according to the declaration must be paid to the budget no later than July 15 of the corresponding year.

By the way, the winners of advertising giveaways, who find themselves in seventh heaven, but dumbfounded by the amount of tax that must be paid on the value of the prize, often torment the Russian Ministry of Finance with similar questions. For example, by letter dated October 28, 2010 No. 03-04-05/6-646, financiers informed one lucky person who won a car worth 430,000 rubles. and who proposed, in this regard, to reduce the personal income tax base by the value of winnings (prizes), that changes to the taxation procedure for such income are not expected.

Using this winner as an example, let’s see what tax losses he will incur by paying personal income tax on the value of the prize received and on the income from the sale of the coveted vehicle.

So, the tax on winnings in this case will be 149,100 rubles. [(RUB 430,000 – RUB 4,000) x 35%].

Suppose a citizen sells a car for the same 430,000 rubles. Then, having declared a property deduction in the declaration, he must pay personal income tax on income from the sale of the car in the amount of 23,400 rubles. [(RUB 430,000 – RUB 250,000) x 13%].

If, for example, both income in the form of the value of the prize and income from the sale of a car were received in 2010, the amount of personal income tax payable to the budget no later than July 15, 2010 will be 172,500 rubles. Let us remind you that this citizen had to submit the declaration no later than May 3, 2011.

Please note that the personal income tax rate is set at 35% in relation to the value of any winnings and prizes received in competitions, games and other events held for the purpose of advertising goods, works and services, insofar as they exceed the amounts specified in clause 28 of Art. 217 of the Tax Code of the Russian Federation (clause 2 of Article 224 of the Tax Code of the Russian Federation).

Consequently, the amount of winnings and prizes received during games, competitions, quizzes and sweepstakes not related to advertising of goods, works, services is subject to personal income tax at a rate of 13%. Such clarifications are contained, in particular, in the letter of the Federal Tax Service of Russia dated March 2, 2006 No. 04-1-03/115. And if a car were won, say, on a TV quiz show, the winner would pay personal income tax on the cost of the win at a rate of 13%.

Do I have to pay tax when winning a car?

Any winnings must be taxed.

Currently, the tax on winning a car in Russia in 2019 is regulated by Chapter 23 of the Tax Code.

The size of such a contribution can be 13% or 35% depending on the type of lottery.

How to determine the tax on a won car?

Winnings are not always money. In some cases, special lucky winners are given the keys to new cars. However, the joy of such an acquisition may upset tax payments.

Depending on the type of lottery, they can be 13% or 35%. The law obliges lottery organizers to notify winners of the need to pay the tax amount.

If the lottery is not a promotional event, then the tax is 13%.

For example, if you win a car worth 2 million, then you must contribute 260 thousand to the budget. If the event was a promotional game, then you will have to pay 700 thousand for the same car.

If you don’t have that kind of money, you can sell your winnings - the law does not prohibit this . In this case, you will be able to receive this amount minus tax contributions.

If the lottery organizer did not inform you or you do not know what the tax is if you win a car, you can contact an independent appraiser.

The data obtained is necessary to fill out a declaration of income received. Keep in mind that you should also contact such an expert if you think that the organizers have inflated the cost of the car you won.

Video: What is the tax on winnings?

How to pay tax on a won car?

It's best to pay tax on your winning car as soon as you take possession of it.

You must deposit funds at your place of residence no later than July 15 of the year following the year in which you won the car.

For example, if you received it in 2015, then you had to pay the tax no later than July 15, 2016. The tax office will be able to tell you exactly what tax is paid on winning a car.

It is also necessary to submit a tax return in form 3-NDFL.

She is sent to the inspectorate at her place of residence. This must be done no later than October 30 of the year following the winning one.

You can see what the tax form looks like on the Federal Tax Service website. There you can also fill out a tax return.

You can send it in the following ways:

deliver independently or through authorized persons;
send by registered mail;
send via electronic signature.

Liability for non-payment

It is mandatory to pay tax on a won car . This need is spelled out in the Tax Code of the Russian Federation.

If you still don’t know whether you need to pay tax when winning a car, you can familiarize yourself with the following sanctions:

The most common fine is the collection of 20% of the total value of the tax required to be paid. The court can easily prove the fact of deliberate evasion of payment of fees, and in such cases the amount of the fine increases to 40%.
There is also a penalty for late payments, which increases daily after July 16th.
Fines are also imposed for failure to file a tax return. In such cases, the sanction provides for 5% of the tax amount for each month of delay.
The amount of the fine cannot be less than 100 rubles. Also, it cannot exceed 30% of the tax base.

In case of prolonged failure to pay the tax on a won car, tax authorities may forcefully collect this amount.

In some cases, authorized bodies submit a writ of execution to a person’s place of work, which is why the overdue amount is deducted from his salary every month.

Criminal liability can only arise for non-payment of large amounts. If you evade paying 300 thousand rubles or more, you may be arrested for a year.

How to calculate tax on winning a car

According to Russian law, any type of income is taxed. Winning a car is not an exception that exempts citizens from paying the contribution. The amount of payment is regulated by the Tax Code of the Russian Federation, or rather its 23rd article. According to this regulation, the tax on car winnings ranges from 13 to 35%, depending on the form of the winnings and the type of lottery.

Disposal of won property

Taking ownership of something by winning a drawing gives the winner all rights in relation to it:

possession - to be an owner;
use - to use for oneself;
dispositions - to decide the fate of property: sell, donate, exchange, inherit, and so on.

In this regard, people often wonder whether they need to pay tax when they win a car if they want to use it for something other than themselves. Regardless of how a person plans to use the received vehicle, he is obliged to pay a state fee in the established amount.

If any order is performed with the received vehicle, you will need to pay another tax. For example, when making a gift, the recipient of the property or his legal representative will pay the gift fee if he has not yet reached the age of majority. A similar process will occur during inheritance. But in a purchase and sale transaction, the seller will be forced to deposit the amount into the state account.

Conducting a purchase and sale transaction of a won car for the purpose of paying tax on the profit received is not prohibited by law and is a common situation.

Tax calculation

Winnings are not always expressed in money; sometimes they can have a material equivalent in the form of a vehicle. But there are also some nuances: paying tax on cash winnings is simple - transfer part of the amount to the state treasury, but when you receive a car, this money must be found somewhere. All participants in the drawing must be notified in advance that if they win, they are required to pay a fee for this. Let's look at the tax on winning a new car.

The amount of tax depends on the type of campaign being conducted:

13% is a regular non-advertising campaign.
35% – advertising game of the lottery organizers.

Let's consider an example: following the results of a lottery, a car worth one million rubles was won. If this was an advertising campaign to attract customers, then for such a machine you will need to pay 350,000 rubles, and if it was just a regular lottery, then only 130,000 rubles.

In the absence of the full amount of tax, the law allows you to sell the prize and pay a duty on the profit from the transaction. In some situations, the value of a vehicle is declared to be inflated, in which case you can contact an independent expert. This specialist will indicate the market value of the car and calculate the tax. You will also need to contact an appraiser to fill out a tax return, since it indicates income in monetary terms.

Information about the recipient of the winnings is provided to the tax office by the lottery organizer, so it will not be possible to hide from payment. They receive personal data when transferring the prize, issuing it only with a passport and SNILS.

How and when is tax paid?

According to current legislation, the deadline for paying the fee for a won car is clearly defined. Money must be deposited by mid-July in the year following the winning year. Let's consider an example: a car was received in September 2017, the tax on it must be paid before July 15, 2018. But if the car was donated in February 2018, then the permissible period for paying the duty is almost a year and a half - until July 2019.

In addition to directly paying the tax, you are also required to submit a declaration to the tax office at the place of registration in form 3-NDFL. This document is binding. If depositing money is permissible until July, then filing a declaration is possible until the end of October, similar to the next year.

The declaration form can be found on the official website of the tax service or on third-party resources. A sample filling is also provided there.

As for the methods of submitting a document, there are several of them:

personal visit to the tax office at your place of residence;
transfer through a proxy to the tax authority at the place of residence;
sending the declaration by registered mail indicating the tax code and its address;
use of online resources and electronic signature.

The last option is the least time-consuming, but requires a personal account on the tax service website and an electronic signature.

If the prize is given in cash, the tax is withheld by the campaign organizer. If the gift is something tangible, for example, a car, then it is given to the person, and a written notification about the winner with the amount of the winnings and his personal data is sent to the tax office.

Tax on lottery winnings

There are different types of lotteries, both private and public. Winnings in them can also be varied. Despite the fact that most of them have a financial form, there are also options with real estate and vehicles (motorcycles, cars, etc.).

The standard rate on lottery income is 13%, but there are a number of exceptions, within which the rate will be 35%:

incentive lotteries held with the aim of drawing customer attention to a certain product or service;
sweepstakes conducted by manufacturers to increase brand popularity.

The difference in interest rates is due to a number of factors. Firstly, advertising lotteries are usually free, that is, a person does not bear any risks. Secondly, the concept of a lottery ticket itself is based on a low chance of success.

The main options for incentive lotteries are:

Lottery receipts in stores. For example, for the fact that a person has made a purchase over a certain amount, he is given the right to take part in the drawing. This pushes people both to simply complete the transaction and to increase their one-time purchase.
Winning phone number. Mobile phone providers may use a random contact method.
Random selection in the form of voting. Such options today are most often carried out on social networks. To do this, you need to take some action, for example, repost a post or write a comment on it. Next, a special program will select a number of winners from all participants. Of course, such giveaways rarely include expensive items, but this is also possible.

The bottom line, one way or another, comes down to the fact that in case of defeat the participant does not lose anything. But regular raffle tickets cost money. Although in most cases they are small, but real, which he pays without guarantees and without receiving anything in return.

If the recipient of the prize is not a resident of the Russian Federation, then what will be the tax on the car he wins? It will be 30% of the amount.

Sanctions for non-payment

Since payment of tax for a won car is mandatory, evasion is punishable by law.

As for the sanctions applied, there may be several options:

Collection from 20% to 40% of the tax amount. The amount of the fine depends on whether the evasion was intentional or not. This is proven in court. As a rule, intentional non-payment is easy to prove, so the fine will be maximum.
Penalties for non-payment are accrued daily from the next day when payment should have been received, that is, from July 16. Despite the fact that their amount is not significant, a large amount of money accumulates over a long period.
Even if the fee has been paid, if a declaration is not filed, you may be fined. The fact is that for its absence, penalties in the amount of 5% of the duty are charged monthly.

In addition to penalties, in case of prolonged non-payment or debt of a large amount, tax authorities may seize the debtor’s accounts or transfer information about this to the person’s place of work. In the second case, money will be paid to the state from the citizen’s salary.

If the debt is over 300,000 rubles and continues to grow, then a decision may be made to ban travel abroad, confiscate property to pay off the debt, as well as a court decision on arrest for up to one year.

Failure to submit a declaration implies liability under Article 119 of the Tax Code.

Double taxation in case of sale of a won car

Often, receiving a vehicle as a gift is associated with its sale.

This is possible for two reasons:

the citizen does not need a car and prefers to receive profit in cash,
The winner does not have sufficient finances to pay the tax.

In both options, the recipient of the prize will need to carefully study the law so as not to become a debtor out of ignorance. As they say, ignorance is no excuse. To win legally, you need to take into account all the nuances associated with this process.

Will I have to pay tax twice if I sell the car I win? Tax authorities argue that winnings and sales proceeds are different sources of income and, as a result, are subject to different taxes. Thus, if the received car needs to be sold, then you will actually have to pay twice. If in the first case the tax is either 13% or 35% (the second happens more often, since companies offering a car as a prize count on attracting customers), then for a purchase and sale transaction a fixed rate for individuals is set at 13%.

There are also tax deductions that citizens can count on if they pay the duty correctly and on time:

4000 rubles to win. Prizes with a value of less than 4000 are not subject to tax.
250,000 rubles for the sale of a car owned for less than three years.

Despite the attractive conditions of preferential taxation, financial losses will amount to a large percentage. Let's consider an example: citizen K received a car as a gift during a promotion for one company. An independent expert estimated its market value at 430,000 rubles. So, the duty on winnings will be 149,100 rubles. This amount is calculated as follows: you need to subtract 4,000 rubles from the final price of the car and multiply by 35%. Since the citizen did not have this money, he decided to sell the received car. He managed to do this at the price compiled by the expert, that is, for 430,000 rubles. On this transaction, he will have to pay 13% tax for receiving income from the purchase and sale transaction. But since the car was owned for less than three years, not the entire amount will be taxed, but it minus 250,000 rubles. As a result, this contribution will amount to 23,400 rubles. The total amount of money received by the state will be 172,500 rubles. From all of the above, we can conclude that the value of the prize received must be determined after the money has been deducted by the state. Although this percentage seems quite high, it is worth noting that in European countries it is 50%. That is, the citizen is obliged to give the state at least half the value of the prize.

Duty evasion is sanctioned by the state, and the citizen will be held accountable in two ways.

Any income received by a citizen of the Russian Federation within the country and abroad is subject to tax. Depending on the method of obtaining it, different tax rates are established. If we are talking about won movable property, then the duty will range from 13% to 35%. In addition to this, it is possible to deposit additional money if actions in the form of purchase and sale are carried out with the received car.

If you win a car, how much tax do you have to pay?

Last update 2019-06-15 at 15:33

The tax on winning a car in Russia is paid by all individuals, regardless of the conditions of the drawing and the type of lottery. But the amount of tax on prizes such as cars and other items varies based on several factors. Let's look at them in the article.

What tax do I have to pay when winning a car?

All gifts, winnings and prizes are the income of an individual, as stated in Article 208 of the Tax Code of Russia in paragraph 10. And income received from Russian resources is recognized as the subject of income tax, therefore, it is required to pay personal income tax.

Before we figure out who pays the personal income tax - the donee or the donor, let's consider the issue of the amount of tax on prizes. In accordance with clause 2 of Article 224 of the Tax Code of the Russian Federation, winnings in competitions, sweepstakes, competitions related to advertising of goods, services and works are taxed at a rate of 35% for all tax residents and non-residents of the country.

At the same time, such prizes are subject to a discount from clause 28 of Article 217 of the Tax Code of the Russian Federation - the amount of winnings up to 4,000 rubles is exempt from income tax. This means that for winning a car, tax is paid on an amount exceeding 4,000 rubles.

Example 1

Important!

Prizes won in promotional events must pay 35% personal income tax.

And if competitions and promotions are not related to advertising of goods, works and services, then the standard income tax rate applies - 13%. If a non-resident wins a car, then you must pay tax at a rate of 30%.

Example 2

If the organizer of a lottery, competition, or game is a tax agent of the state, then he himself will pay personal income tax for the recipients. If the organizer of the drawings does not perform such actions, then the recipient is obliged to:

submit a 3-NDFL declaration;
pay tax.

What you need to know about these responsibilities:

the declaration form must correspond to the year of submission; for 2018 the following form ;
income is reflected in sheet Appendix 1;
the non-taxable part of the prize is reflected in sheet Appendix 4;
the report must be submitted by the end of April of the year following the year in which the prize was received;
you can fill out the form through the “Declaration” program, available on the website of the Federal Tax Service of Russia;
you can fill out and submit a declaration through the Taxpayer’s Personal Account;
after filing the declaration, you must pay personal income tax - before July 15;
For late declarations or taxes, the violator faces fines and penalties.

Winning a car is subject to personal income tax.
If the car was received in an advertising competition , then the tax is paid at a rate of 35%, but with a deduction of 4,000 rubles.
If the car was received in a competition without an advertising component, then personal income tax must be paid at a rate of 13%, but with a deduction of 4,000 rubles.

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Do I have to pay tax when winning a car?

Winning is not always money, sometimes it is a luxurious gift - the keys to a shiny new car. But while enjoying the joyful moment, we must not forget that a huge disappointment for many winners is the need to pay tax on their winnings. Regardless of which prize you win, you will have to pay tax on it. Any winnings in the Russian Federation are subject to taxes. In this regard, you must remember to send information about the new property and its owner to the tax office. In the future, the owner to whom the car will be registered must annually pay tax on the vehicle.

What is the amount of state tax for a won car?

As for the car that was won, in accordance with Chapter 23 of the Tax Code of the Russian Federation, when receiving it as a win, you must pay 13% or 35% tax to the state treasury in the form of a tax in accordance with Art. 224 codes. These amounts are quite large, their size depends on what type of drawing the lucky owner of the new car participated in. Paying such a state tax should not be a surprise for a new car owner. The organizers of such drawings are obliged, in accordance with the law, to inform the winners that the tax is a mandatory payment to the state treasury, its payment is required by the Tax Code.

A rate of 13% of the winning amount is charged if the organizers hold an event that is not of a promotional nature. If the cost of the won car is 3,000,000 rubles, the winner will have to pay 390,000 rubles in tax. A 35% rate must be paid if a vehicle at that price is raffled off during the promotion. In this case, the prize winner must contribute 1,050,000 rubles to the state treasury.

What to do if there are no funds to pay?

The cost of the prize (car) is quite high. Anyone can win such a gift, regardless of their income level. If we are talking about a wealthy citizen, he most likely will not worry about the amount of tax he must pay. But if the income of the owner of an expensive prize is insignificant, he will not be able to contribute such an amount. If the person receiving the prize does not have the means to pay, there will be no release from such obligation. The only thing that can be done in this case is to sell the won car. The law does not prohibit performing such actions with a prize. In this case, the amount of the tax payment will be deducted from the proceeds. The remaining funds can be spent at your own discretion.

What to do if the real value of the winnings is not known?

There are cases that the event organizers did not inform the winner of what tax the owner of the prize must pay. In this case, an independent appraiser will help. The data he provides will become the basis for filling out a tax return on the amount of income received. You can also contact an independent expert if the citizen who won the car has doubts about the veracity of the data on the cost of the car provided by the organizers of the draw, and considers it to be overpriced. Tax inspectors can also calculate the exact tax payment from the won car.

Payment procedure

It is advisable to pay the tax accrued on the won car immediately after receiving ownership of the vehicle. The fee is paid at the place of registration of its owner. This must be done no later than July 15 in the year following the year in which this winning was received. If the car was received in 2017, the required amount must be paid no later than July 15, 2018. You need to know that the law requires filing a tax return. For this purpose, a special form 3-NDFL has been developed, which is sent to the inspectorate at the place of registration of the taxpayer. This tax document must be submitted no later than October 30th of the year following the year in which the vehicle was won. The declaration form can be found and filled out on the Federal Tax Service website and sent by mail, submitted to the tax office in person or sent by email.

Liability for non-payment

In case of failure to pay the fee on winnings, certain penalties are provided for the defaulter. Sometimes authorized bodies send a writ of execution to the place of work of the tax debtor. Such a document allows you to deduct the amount of overdue payment from your salary every month. If a citizen is ready to bear responsibility for non-payment, then he will have to pay:

A fine of 20% of the amount of the unpaid fee is the most commonly used sanction;
A fine of 40% of the tax payment amount - in case of deliberate tax evasion;
Penalty for daily late payment;
A fine of 5% of the amount accrued monthly is for failure to file a tax return.

The fine will be more than 100 rubles and not higher than 30% of the tax base. Even if such sanctions do not have an effect, and the owner of the won car does not intend to pay, representatives of the tax inspectorate have the right to forcefully collect the unpaid funds. It is possible to incur criminal liability for non-payment only in case of debt of significant amounts: if the amount of the debt exceeds 300,000 rubles, the debtor can be arrested for a period of 1 year.

Conclusion

Thus, the citizen who won the car will, in any case, have to pay tax on the income received to the Federal Tax Service by submitting the appropriate declaration. The rate of such tax will depend on the method of winning (promotion, competition, game, etc.). After registering a car with the traffic police, a citizen will have to pay transport tax annually. For failure to pay, a person faces liability in the form of penalties.