Is it possible to reimburse personal income tax when buying a car?

Refund of personal income tax when buying a car on credit

The number of cars sold on credit is increasing every year.
Is it possible to return personal income tax if the car was purchased on credit? We addressed this question to the experts of the Legal Consulting Service GARANT Damir Gilmutdinov and Elena Melnikova. Having examined the issue in detail, the experts came to the following conclusion: personal income tax, subject to refund from the budget, may arise due to the use by the taxpayer of tax deductions provided for in Chapter 23 of the Tax Code of the Russian Federation.
At the same time, tax deductions for taxpayer expenses for the purchase of a car, including on credit, are not provided for by Chapter 23 of the Tax Code of the Russian Federation.

From paragraph 1 of Art. 210 of the Tax Code of the Russian Federation it follows that when determining the tax base, all income of the taxpayer received by him both in cash and in kind, or the right to dispose of which he has acquired, is taken into account.

At the same time, Art. 218-220 of the Tax Code of the Russian Federation provides that for tax purposes, a taxpayer can reduce income received in a tax period (year) by the amount of tax deductions: standard, property, social.

Standard tax deductions (Article 218 of the Tax Code of the Russian Federation)

Standard tax deductions include, in particular: a tax deduction in the amount of 400 rubles for each month of the tax period, valid until the month in which income, calculated on an accrual basis, exceeded 40,000 rubles (clause 3, clause 1, article 218 of the Tax Code of the Russian Federation) , as well as a tax deduction in the amount of 1,000 rubles for each month of the tax period for each child of the taxpayer, which is valid until the month in which the income exceeded 280,000 rubles (clause 4, clause 1, article 218 of the Tax Code of the Russian Federation). In addition, the standard deductions include the deductions established by paragraphs. 1 and 2 paragraphs 1 art. 218 Tax Code of the Russian Federation.

Standard tax deductions are provided to the taxpayer by one of the tax agents who are the source of payment of income, at the taxpayer’s choice based on his written application and documents confirming the right to such tax deductions.

As we see, when purchasing a car, including using credit funds, standard tax deductions cannot be applied.

Property tax deductions (Article 220 of the Tax Code of the Russian Federation)

Property tax deductions can be divided into two groups.

Firstly, deductions in the amount of income received that is not subject to taxation.

Such deductions include, in particular, the property tax deduction provided for in paragraphs. 1 clause 1 art. 220 Tax Code of the Russian Federation. Namely, income received by the taxpayer in the tax period from the sale of residential houses, apartments, rooms, including privatized residential premises, dachas, garden houses or land plots and shares in the said property that were owned by the taxpayer for less than three years, but not exceeding in total 1,000,000 rubles, as well as in amounts received in the tax period from the sale of other property that was owned by the taxpayer for less than three years, but not exceeding in total 250,000 rubles (as amended by clause 1, clause 1, article 220 Tax Code of the Russian Federation since January 1, 2010). That is, the total amount of income of an individual is reduced by the amount of income from the sale of property. Let us note that they are not excluded from the concept of “taxpayer income”.

If the taxpayer sells property that has been in his ownership for three years or more, then from January 1, 2009, the norm of clause 17.1 of Art. 217 Tax Code of the Russian Federation. According to it, income received by individuals who are residents of the Russian Federation during the tax period from the sale of residential houses, apartments, rooms, including privatized residential premises, dachas, garden houses or land plots and shares in the said property, which were in their ownership for three years or more, as well as when selling other property that was owned by the taxpayer for three years or more, they are not subject to taxation.

Thus, a property tax deduction can be applied by an individual in connection with the sale (but not in connection with the purchase) of a car owned by him (see, for example, letters of the Ministry of Finance of Russia dated December 7, 2009 N 03-04-05-01 /864, Federal Tax Service of Russia for Moscow dated 01.09.2009 N 20-14/4/091201@, dated 18.09.2009 N 20-14/4/099503@ and others).

The second group includes property tax deductions in the amount of expenses incurred by the taxpayer.

Subclause 2, clause 1, art. 220 of the Tax Code of the Russian Federation provides for a decrease in income for expenses incurred by the taxpayer:

for new construction and purchase of housing;
to repay interest on targeted loans (credits) received and actually spent on new construction or purchase of housing;
to repay interest on loans received for the purpose of refinancing (on-lending) loans for new construction or purchase of housing.

As we can see, this group of property deductions also does not include deductions in the form of expenses for the taxpayer’s purchase of a car, including those involving credit funds.

Property tax deductions (with the exception of property tax deductions for transactions with securities) are provided when the taxpayer submits a tax return to the tax authorities at the end of the tax period (clause 2 of Article 220 of the Tax Code) or when contacting the employer regarding the property deduction provided for in clause. 2 p. 1 art. 220 of the Tax Code of the Russian Federation (clause 3 of Article 220 of the Tax Code of the Russian Federation).

Social tax deductions (Article 219 of the Tax Code of the Russian Federation)

Article 219 of the Tax Code of the Russian Federation “Social tax deductions” establishes a decrease in income received by the taxpayer for expenses in connection with:

transfers for charitable purposes in the form of monetary assistance to organizations of science, culture, education, health and social security, as well as physical culture and sports organizations, educational and preschool institutions for the needs of physical education of citizens and the maintenance of sports teams, as well as in the amount of donations transferred (paid ) religious organizations for the implementation of statutory activities - in the amount of expenses actually incurred, but not more than 25% of the amount of income received in the tax period (clause 1, clause 1, article 219 of the Tax Code of the Russian Federation);
payment by the taxpayer during the tax period for his education in educational institutions - in the amount of actual expenses incurred, taking into account the limitation established by clause 2 of Art. 219 of the Tax Code of the Russian Federation, as well as in the amount paid by the taxpayer-parent for the education of their children under the age of 24, by the taxpayer-guardian (taxpayer-trustee) for the education of their wards under the age of 18 in full-time education in educational institutions - in the amount of actual expenses incurred for this training, but not more than 50,000 rubles for each child (clause 2, clause 1, article 219 of the Tax Code of the Russian Federation);
payment by the taxpayer in the tax period for treatment services provided to him by medical institutions of the Russian Federation, as well as paid for treatment services of a spouse, his parents and (or) his children under the age of 18 years in medical institutions of the Russian Federation (in accordance with the list services approved by the Government of the Russian Federation), as well as in the amount of the cost of medicines (in accordance with the list approved by the Government of the Russian Federation), prescribed by the attending physician, purchased by taxpayers at their own expense (clause 3 of clause 1 of Article 219 of the Tax Code of the Russian Federation);
implementation of taxpayers' expenses for voluntary pension insurance and (or) non-state pension provision (clause 4, clause 1, article 219 of the Tax Code of the Russian Federation);
payment during the tax period of additional insurance contributions for the funded part of the labor pension in accordance with the Federal Law “On additional insurance contributions for the funded part of the labor pension and state support for the formation of pension savings” - in the amount of actual expenses incurred, taking into account the limitation established by clause 2 of Art. 219 of the Tax Code of the Russian Federation (clause 5, clause 1, article 219 of the Tax Code of the Russian Federation).

Social tax deductions specified in paragraphs. 2-5 p. 1 tbsp. 219 of the Tax Code of the Russian Federation (with the exception of expenses for the education of the taxpayer’s children and expenses for expensive treatment), a total of no more than 120,000 rubles are provided in the tax period. In this case, the taxpayer independently chooses which types of expenses and in what amounts are taken into account within the maximum amount of the social tax deduction. Social tax deductions are provided when submitting a tax return to the tax authority at the end of the tax period (clause 2 of Article 219 of the Tax Code of the Russian Federation).

As we can see, among the social tax deductions, the deduction in connection with the purchase of a car, including with the use of credit funds, is not named.

Thus, Chapter 23 of the Tax Code of the Russian Federation does not provide for tax deductions, as a result of which personal income tax is subject to refund from the budget in connection with the purchase of vehicles. Consequently, a refund of personal income tax from the budget for such an operation is impossible.

Experts from the Legal Consulting Service GARANT
Gilmutdinov Damir and Melnikova Elena.

Can I get a tax refund when buying a car?

Many Russian citizens are interested in the question of whether it is possible to return income tax when purchasing a vehicle. In order to dispel all the myths and assumptions, it is worthwhile to figure out in order whether there is a tax deduction when buying a car, and what benefits are available to persons selling vehicles.

What is a property tax deduction

To understand whether conscientious taxpayers are entitled to tax deductions when purchasing a car, you should familiarize yourself with the term “property tax deduction.” This is a benefit guaranteed by the state to individuals after the purchase or sale of property. The right to a personal income tax refund is provided for by the Tax Code of the Russian Federation (Article 220).

You can use the deduction when purchasing and alienating apartments, private houses, summer cottages, plots of land and when selling other property (garages, vehicles).

Who is eligible for a 13% personal income tax refund?

If you want to get a tax deduction when buying a car, you need to know the requirements imposed by law. An individual must be a resident of the Russian Federation and have official earnings, from which income tax is withheld at the rate of 13%.

Will there be a benefit if you purchase a car?

Tax legislation in the Russian Federation undergoes frequent changes. In this regard, the pressing question arises of how to return tax deductions for the purchase of a car.

Vehicles are classified as expensive goods. To buy a car, people have to take out loans. For respectable payers, a tax refund when buying a car would be an excellent solution for paying off the next installment under a loan agreement.

When it comes to buying real estate: a house or an apartment, everything is clear - a citizen who regularly pays taxes will return 13% of the cost of the purchased property (up to 260,000 rubles).

Even if a vehicle is purchased on credit, a citizen will not be able to claim compensation. The Tax Code of the Russian Federation states that an individual has the right to reduce income for expenses incurred if the following circumstances exist:

Interest was paid under the loan agreement, which was issued to refinance loans intended for the purchase of a residential property or its construction.
Interest on a loan taken to build or purchase housing is repaid.

Nothing is said about the car. The vehicle is property and, logically, a deduction should be applied to it. But it is applicable to individuals in other cases:

To pay interest on a loan to build a house or buy land.
For the purchase of a residential building or apartment or shares in them.
For the construction of a residential property and the purchase of plots of land for development.

In accordance with the norms of the Tax Code of the Russian Federation, the property deduction applies only to real estate, which includes apartments, cottages, country houses, and land for individual construction. An individual does not have the right to reduce the personal income tax tax base by the amount spent on the purchase of a vehicle. There is only one reason: the law does not provide for property deductions for a car.

Truth and myths

The inability to return 13% of personal income tax when purchasing a car can be explained by the fact that in the Russian Federation a car is a luxury, not a means of transportation. Another answer: the role of the vehicle in the modern world is underestimated. But the procedure for transferring ownership, registration, payment of state duty after purchasing a car is carried out according to a similar scheme as in the case of purchasing housing.

Often the prices for an apartment and a car are comparable. In this regard, there are transactions to exchange an apartment for a car and vice versa. Despite this, the law does not establish tax deductions for vehicles.

What is a taxpayer entitled to?

You cannot receive a refund when purchasing a car. But the legislation provides people with another opportunity - they can return the tax on the purchase of a car if it is sold. To do this, you will need documentation that confirms the fact of a purchase-sale transaction indicating the value of the property.

An individual can receive a compensation payment for a purchased car in the following cases:

The vehicle was purchased more than three years ago. In this situation, you will not need many documents. A property deduction is calculated automatically if a person has owned a car for three or more years. The Federal Tax Service is presented with papers indicating the cost of the vehicle.
If a citizen sells a car less than three years later at a price less than it was when purchased.

In the latter case, the right to a refund of income tax is explained as follows: when purchasing transport, a person spent his own funds. And sold it for a lower price. As a result, he received no profit, only expenses. If there is no income, you do not need to pay tax.

Benefits for sellers

If buyers are not entitled to a tax break when buying a car, sellers are provided with it, only in part.

Documents for receiving a deduction

Tax refunds are made upon presentation of a document identifying the person. A copy of the passport is provided to the tax authority.

Tax reporting – declaration form 3-NDFL. You can fill it out yourself or using special programs and print it out.
Certificate of income from place of work, form 2-NDFL.

You must submit an application for a deduction. The document is drawn up in any form. Be sure to indicate:

Reason for requesting compensation.
Information about the car purchase and sale transaction.
Information about the purchaser of the vehicle.

The application indicates your income and the amount of money spent on the purchase of the car. The application must be accompanied by documents directly related to the transaction. These are:

Purchase and sale agreement (original or certified copy).
Papers confirming income and expenses (receipts, checks).
Payment certificate.
Certificate of ownership of the car.
Technical equipment passport.

It is advisable to make certified copies of the last two documents from the list.

The vehicle alienation agreement can be replaced with a certificate from the traffic police, which contains data about the car:

Name.
Make and model.
Date of issue.
License number before concluding a deal.

The certificate also contains information about the owner of the vehicle.

What to do if you haven’t kept the documents confirming the purchase of the vehicle?

There is no need to sound the alarm if you were unable to save the documentation confirming the purchase of the vehicle. The citizen still retains the right to return. But some complications may arise. Subtleties of the question:

A person is still exempt from taxes if he sells the car after using it for more than 3 years.
Sales of a car at a price of less than 250,000 rubles are not subject to personal income tax.

For example: a person sells a vehicle for 500,000 rubles. There are no documents confirming its purchase. A citizen is required to pay income tax. In this case, 13% will be deducted not from the full amount, but from the 250,000 rubles that will remain from the return. The seller is obliged to pay 32,000 rubles to the treasury. If he had documentation confirming the costs of purchasing the vehicle, the tax would not be withheld.

The procedure for returning personal income tax upon alienation of a car

To pay compensation, a citizen fills out a declaration, collects the list of documents indicated above, and draws up an application for deduction. Sends a package of documents to the tax authority located at the place of residence. This must be done before April 30 of the year following the one in which the profit was made.

If the vehicle is owned by several owners, each of them submits a declaration. The tax refund will be paid in proportion to the share or by agreement between the co-owners.

It is advisable to submit the application for deduction and tax return to the Federal Tax Service at the same time.

Within 3 months, the inspectorate conducts a desk audit, based on the results of which a decision is made on payment of compensation or refusal. If there are no complaints about the attached documentation, the money will be credited to your bank account within a month.

The state considers personal transport more of a luxury than a necessity. In this regard, a refund of part of the income tax for the purchase of a vehicle is not provided. The law regulates only tax deductions when selling a car under certain conditions. If an individual alienates a car that has been owned for more than three years, he is given a benefit instead of a property deduction. There is no need to submit a declaration to the Federal Tax Service. Income tax will not be levied on the full amount received from the sale of the vehicle, but on part of it.

Can I get income tax back on a car purchase?

Due to constant changes in modern legislation, the question increasingly arises: is there a tax refund when buying a car?

Many residents of Russia have seen from their own experience the pleasant possibilities of providing property tax deductions following the acquisition of real estate.

Therefore, the question of whether and how an income tax refund is provided when purchasing a car in 2019 is quite logical and relevant.

Cars are quite expensive goods . The situation is further complicated by the fact that most vehicles are purchased using credit funds.

It is for this reason that the possibility of a tax refund for the purchase of a car in the form of additional funds would be the optimal help for paying the next loan installments.

In this information article, you can understand the following questions: in what cases is a 13% tax refund due during the acquisition process, what tax deductions exist, how best to save during the sale process, and also how not to save.

Possibility of return 13 percent

The law provides special benefits for categories of citizens specified in legislative documents.

One of the most popular options is the return of previously paid tax on income received, the amount of which is 13%.

These material assets can be returned by people who paid personal income tax to the state during one calendar year and made certain major acquisitions.

Those citizens who have spent large sums on the following purposes can be guaranteed to return 13%:

purchase or construction of real estate;
obtaining higher or specialized education;
carrying out therapeutic and diagnostic procedures;
charity.

These are expenses that fall into the category of necessary and important for life; it is for this reason that certain tax benefits are provided for them.

Purchasing a vehicle is not included in the list of essential items, therefore the answer to the question whether income tax can be refunded on the purchase of a car is negative.

Despite this, there are several options with which you can save your expenses . Among them, the possibility of a tax deduction when selling a car deserves special attention - this is an ideal opportunity to save capital.

Basic options for saving

As you know, from the funds raised in the process of selling a car, you will need to pay 13% of the proceeds..

In other words, selling a car means making a certain profit, which must be reported by April 30 of the year following the date of receipt of payment.

The tax will need to be paid no later than July 15, within 2.5 months after the report is compiled and sent . This is a definite rule that also has some exceptions.

For example, you will not need to fill out a declaration and pay tax if the vehicle has been owned for more than 3 years.

This period of car ownership can be calculated in different ways, it all depends on the option of obtaining ownership of the car:

Regular purchase . In this case, the time of car ownership will be counted from the very moment of purchasing the car.
Inheriting a vehicle . In this case, the beginning of ownership is the day of death of the former owner.
Receiving a car as a gift . The tenure period here begins from the moment the contract is signed.

If three years have not passed after receiving ownership of the vehicle and you want to sell it, by law you will have to pay 13% of the sale price.

It is worth considering options that would allow you to avoid paying the 13% tax.

Selling without profit

This is the best option for saving money. This opportunity opens up when paying the tax accrued on the difference in the value of the car at the time of its sale and purchase, even if they do not coincide at all.

This technique is also called “sale cost of minutes purchase price”. In this case, personal income tax will be calculated as follows - sale price - cost of initial purchase * 13%.

This technique can only be applied if the original documents are stored, and the costs must be attributed to one car.

If the car was sold for a price lower than the purchase price, the tax may not be paid at all. If you have owned the car for less than three years, you will still have to fill out a declaration.

Standard deduction

This is the best option for inheritance and gift.

Modern legislation provides for a special property tax deduction on cars and amounts to 250,000 rubles. This is the amount on which no tax is paid.

In other words, if the amount from the sale of a car is no more than 250,000 rubles, the 13% tax is not paid.

So, if a car donated or inherited was sold for 240,000 rubles, then in the process of using the standard deduction you will not have to pay any tax deductions.

Application of the netting method

If last year a person not only sold a car, but also acquired certain property, it is possible to arrange mutual tax compensation of one for the other.

For example, if an apartment was purchased for 1.5 million rubles and a car was sold for the same amount, you will need to pay 13% on the sale of the car, and then return it as a tax deduction from the purchased housing.

Due to the fact that the transaction amounts are equal, nothing will need to be paid.

To receive personal income tax reimbursement for a special property deduction, you will need to comply with one important rule. A person can use it only once, and a situation is also acceptable when he has the remainder of the purchased home at his disposal.

General procedure for processing documents

To carry out income tax manipulations, you need to make sure that all documents are in order . Many people treat automobile papers not as responsibly as those that belong to apartments and various real estate properties.

The tax organization will most likely need to provide the following important papers necessary to resolve the issue of how to receive a refund:

PTS with strictly fixed information data regarding the transaction. As soon as the data for the new owner is entered into the passport, it is better to make a copy of it.
An official agreement on a transaction , in particular on the sale of a car, where the amount from the sale of the car is clearly stated.
Documents from a financial institution . This may include an account statement where, after the sale, funds from the sale were transferred; all necessary payments, receipts, receipts and checks will be required. In other words, confirmation of receipt of material funds will be required.

As soon as the vehicle is sold, the owner must submit a 3-NDFL declaration . This must be done before April 30, regardless of whether income tax is being refunded or charged.

Until July 15 of the year following the reporting year, that is, the one in which the transaction was carried out, you will need to pay personal income tax.

To receive a refund, you will need to attach an application written in a special form to the package of documents, as well as copies of your Taxpayer Identification Number (TIN) and passport.

In the process of drawing up and submitting a declaration of income received and a correctly written statement from a legal point of view, you need to make copies of documents, but also be prepared for the fact that you will need to present the originals.

It is also strongly recommended not to take the designated deadlines for submitting documents lightly.

The question of whether it is possible to submit a declaration later than the deadline, for example, next month, can only be answered in the negative.

In 2019, a sanction penalty may be imposed for violating the deadlines for completing and submitting documents to a tax organization.

This also affects subsequent more serious civil liability, which can sometimes reach legal proceedings.

Deduction from a car purchased on credit

Many car owners are interested in the question of whether it is possible to return tax on the purchase of a car on credit.

In the modern list of tax benefits, in addition to the return of personal income tax for the acquisition of a particular property, it is possible to return the deduction of loan funds from the amount of interest that was paid for the acquisition of property.

Important! Based on all the information above, it is impossible to return personal income tax for a car that was purchased on credit under this legislation.

If such an opportunity arises, it will only be after the adoption of special amendments to established laws and only with various restrictions.

Currently, citizens have the opportunity to receive a tax deduction only from the sale of a car; unfortunately, not yet for the purchase.

Possibilities of the new version of the law

Some deputies have prepared a bill regarding the inclusion of a vehicle in the list of property, after the acquisition of which it will be possible to qualify for a deduction. If it is adopted, it will be only with some restrictions.

Among the most likely of them are:

the vehicle must be new;
the return applies only to domestic brands of cars or relatively budget vehicles from foreign manufacturers, but only those produced in Russia;
the total amount of the deduction should not exceed 500,000 rubles.

After deducting such an amount, you cannot use this opportunity again; it only works once. It is also expected to compile a list of specific brands and models of vehicles.

If a deduction is provided, it will only be for those citizens who buy their first car.

This law is being considered and is quite attractive for the reason that government authorities are aimed at stimulating consumers to purchase domestic cars, that is, helping to develop the Russian automotive industry.

If this law comes into force, it will be possible to return up to 65,000 rubles.

For example, if a car that meets the requirements was purchased, the cost of which is 400 thousand rubles, the amount of personal income tax intended for return will be equal to 400,000 × 13% = 52,000 rubles. It will no longer be possible to receive the remaining 13,000 rubles.

If a car is purchased for 600,000 rubles, where the amount exceeds the established norm by 100,000 rubles, the deduction amount will be equal to 65,000 rubles, that is, 500,000 × 13% = 65,000.

Summing up

Based on everything said above, it can be noted that in the near future, a tax deduction in the process of purchasing a car will be exactly the same as all other tax deductions and benefits.

If the question of how to return income tax from the purchase of a car is resolved universally and at the legal level, this procedure will be beneficial to everyone without exception - the state and car owners.

As soon as such a law comes into force, all necessary changes will be made and it will be possible to return the legal 13% of the purchase of the car . On this basis, buyers will not want to underestimate real amounts in contracts.

Accordingly, with the tax refund from the purchased car, the personal income tax refund during the sale of the vehicle will also increase. This is a mutual benefit.

Tax refund when buying a car: is there a tax deduction?

It’s not uncommon today to hear: “Have you bought an apartment? Did you return the tax? Yes, it's convenient and profitable. Who would refuse this? At first, it took us a long time to get used to the property tax deduction for housing, it all seemed like fairy tales, but today every realtor, and even ordinary buyers and sellers, know what a personal income tax refund is when buying a home and the intricacies of this issue.

Quite often today you can hear the question, is there a tax deduction for the purchase of a car (car)?

Property tax deduction for the purchase of a car - does it exist or not?

With the purchase of housing, everything is clear: when purchasing real estate worth up to 2 million rubles, the taxpayer can return up to 260 thousand rubles (13% of the cost of the purchased apartment or house) see how to get a property tax deduction.

Selling a car

Here's what the law says about tax deductions when selling a car:

If the car has been owned for more than 3 years (36 months from the date of the contract), then the citizen is exempt from paying tax.
When selling a car that has been owned for less than 3 years, a citizen must submit a declaration in form 3-NDFL (otherwise a fine of 1000 rubles) indicating the cost of selling the car. If a car is sold for more than what was spent on the purchase (documented), the seller must pay personal income tax of 13% on the difference (see how to calculate and pay tax when selling a car less than 3 years old).
The sale of a car worth up to 250,000 rubles is not subject to taxation. That is, even if a citizen made a profit from the sale of a car, but the sale price is less than 250 thousand rubles, such an amount is a tax deduction and is not subject to taxation. But, a 3-personal income tax declaration should be filed in any case if the car has been owned for less than 3 years.

Why is there no tax deduction when buying a car?

Either the legislator underestimates the role of the car in modern life, its influence on the development of the transport system, or considers cars a luxury and not a necessity. Yes, and the transfer of ownership is just as complicated as with housing: the same registration, the same state fees, queues, etc.

By the way, the prices are comparable. Transactions involving the equivalent exchange of a car for an apartment or vice versa are not uncommon. But the fact remains a fact and we will firmly emphasize it once again: the legislation does not provide for a property tax deduction for the purchase of a car.

Personal income tax refund when buying a car

Tax deductions are understood as benefits that the state gives to those citizens who buy housing or use certain services - mainly in the field of medicine and education.

Oddly enough, a car is not included in this list, although it often costs more than an apartment and is just as important for a person. But the tax authorities think differently and do not allow personal income tax to be returned when purchasing a car. Such deductions simply do not exist by law.

You can save money only when you sell the vehicle. There are mechanisms in place that allow you to make a deduction when selling cars that have been owned for less than 3 years. Possible savings also depend on the cost of the car.

The purpose of our article is to answer the question of how to return a tax deduction for the purchase of a car and consider ways to reduce the tax base when selling it.

Is it possible to get a personal income tax refund when buying a car?

The state provides the right to return 13% of the cost of purchased housing if its price does not exceed 2 million rubles. In this case, the maximum refund amount is 260 thousand rubles. It doesn’t matter whether real estate is purchased for cash, non-cash or on credit.

Cars are property. To understand whether a personal income tax refund is possible when purchasing it, let’s turn to the list of property deductions established by the tax authorities (clause 1.2 of Article 220 of the Tax Code of the Russian Federation):

Purchase of real estate (house, apartment or other residential space, as well as a share in it);
Construction of a residential property and purchase of a plot of land for this construction;
Repayment of loan debt if it was taken out for the purchase of housing, its construction (or for the purchase of land for a house);
Refinancing a loan taken for the construction or purchase of real estate.

This list is exhaustive and cars are not included. Which means it is fundamentally impossible to return income tax when purchasing it. The Tax Code allows deductions from the purchase of absolutely any home or land for it, but it will be impossible to return part of the taxes paid when buying a car.

Income tax refund upon sale of a vehicle

To answer the question of whether it is possible to obtain tax benefits when selling a car, you must first determine the period of ownership.

Case 1 . You have owned the car for more than three years. You are completely exempt from paying taxes upon sale. There is no need to even file an income tax return.

Case 2 . You have owned the car for less than three years. Clause 1 Art. 220 NK offers 3 possible scenarios:

If the price of the car is 250 thousand rubles or less, then when it is sold, a copy of its technical passport (PTS) and the sales agreement are attached to the declaration of Form 3-NDFL. These papers will confirm that the transaction did not exceed the specified amount.
The sale price of the vehicle exceeded 250 thousand, but no documents confirming this were preserved. If the income exceeds the predetermined deduction, then a tax of 13% is imposed on the difference. If the difference is negative, no income tax is paid, but a tax return is filed on a general basis.
The income from the sale exceeded 250 thousand and the necessary documents are on hand. In this case, a person has 2 outcomes - calculate the tax base as the difference between income and the amount of 250 thousand or as the difference between income and the cost of the property sold.

What are the conditions for receiving a tax deduction?

The seller is a Russian citizen and tax resident;
He has documents in his hands that indicate the fact of selling the car (purchase agreement);
There is a copy of the title on hand, which will confirm that the car sold belonged to the taxpayer. It is best to make this copy after the new owner’s details have been entered into the PTS. Then the document will serve as additional evidence of the sale itself.

Drawing up an application for personal income tax refund

To receive a tax refund, a citizen submits an application in the prescribed form to the Federal Tax Service. It states a number of facts:

Full details of the benefit recipient - his full name, residential address, contact phone number and individual taxpayer number;
Reasons for which a refund is possible (they can be found in clause 1, clause 2, article 220 of the Tax Code);
Total amount of tax deduction;
The account to which the money will be transferred;
Documents certifying the fact of the transaction (purchase and sale agreements, sales receipts, receipts, etc.).

The completed application is submitted to the Federal Tax Service at the place of registration of the taxpayer. Tax inspectors check the received documents and the right to a personal income tax refund within 30 days.

Recommended car sales tax refund scheme

What might the return procedure look like in practice?

If it is assumed that you will someday sell the purchased car, then immediately take care to save the necessary documents that will help you obtain a tax deduction;
Since it is impossible to return personal income tax when buying a car, keep the sales agreement, where the price will be stated. Have this document certified by a notary. It will be useful when selling the car in the future;
For the next 3 years, collect and save checks and receipts that will record the costs of servicing the car. This is done in cases where, within the specified period, you are going to sell the car at a lower price than you bought it for. This often happens if the vehicle has lost its attractive presentation or has significantly lost its technical characteristics;
To sell a car, it must be registered with the State Traffic Safety Inspectorate, otherwise you will not be able to register the sale and submit a 3-NDFL declaration. Make sure that all debts associated with the vehicle have already been repaid by the time of sale;
When you sell a car at a lower price than you bought it yourself (and this is what happens most often), then you have the right to count on a tax deduction. This means that the previous owner does not have to pay 13% of the income.

The lack of necessary documents related to the purchase of a car and its operation cannot become a basis for denial of a tax benefit. But this can significantly complicate the procedure. For owners who have owned the car for more than three years, everything is much simpler. There is no need to pay personal income tax, regardless of the cost of the car and other conditions.

Income tax refunds for car purchases in 2019 are not available and are unlikely to be available in the foreseeable future. After all, such benefits are given only for transactions that are vital for a person - housing, education, treatment and medicine. Alas, a car is still considered not a basic necessity, but a luxury, an attribute of a prosperous life.

As long as the tax authorities maintain this view of vehicles, changes in Russian legislation cannot be expected.