Tax when buying a used car

Car sales tax in 2020

Good afternoon, dear reader.

Every car owner sooner or later has to face the need to sell his own car. The reasons for the sale can be completely different, but today we will not talk about them.

I think it’s no secret to you that currently all transactions for the sale of property are subject to income tax. This also applies to transactions aimed at selling a car.

The amount of tax on car sales depends on several factors, which will be discussed in this article. In addition, we will talk about situations in which income tax on the sale of a car can be avoided for completely legal reasons.

Even if you are not planning to sell your car in the near future, I recommend that you read the text of this article. The information received will help you avoid unnecessary problems in the future.

For clarity, I propose to consider in this article several examples of car sales:

1. The Yenisei 1 car was purchased in January 2019 for 500,000 rubles and sold in September 2019 for 450,000 rubles.
2. The Yenisei 2 car was purchased in January 2015 for 300,000 rubles and sold in September 2019 for 450,000 rubles.
3. The Yenisei 3 car was purchased in January 2019 for 200,000 rubles and sold in September 2019 for 450,000 rubles.
4. The Yenisei 4 car was purchased in January 2019 for 350,000 rubles and sold in September 2019 for 450,000 rubles.
5. Yeniseichik’s car was purchased in January 2019 for 200,000 rubles and sold in September 2019 for 250,000 rubles.

In the process of studying this article, you will learn how to determine the amount of tax on the sale of any car and will be able to easily calculate the amount of contributions to the state for Yenisei cars.

Note. If you want to sell a car that you did not buy, but received as a gift or inheritance, then I recommend studying the examples from the article “Paying taxes when selling a gifted car.”

Amount of car sales tax

The personal income tax is currently 13 percent .

In relation to Yenisei brand cars, the amount of income tax is:
450,000 * 0.13 = 58,500 rubles.

Agree, the amount is quite impressive. However, none of the sellers will have to pay this entire amount.

Car sales tax

Let's consider the main situations in which the tax amount can be reduced:

1. Lack of income

Let's take a closer look at the situation with the Yenisei 1 car again. This car was bought for 500,000 rubles and sold for 450,000 rubles. Obviously, the seller did not receive any income at all, i.e. the income tax amount is 0.

However, in this case, you should pay attention that in order to be exempt from paying tax on the sale of a car, you must submit a declaration to the tax office with attached sales agreements (or copies thereof). We will talk more about the deadlines for filing a declaration a little later.

In this case, there must be 2 contracts. One of them was drawn up when buying a car (in January), and the other when selling it (in September). If the car purchase and sale agreement has not been preserved, then you should turn to other ways to reduce the tax.

2. Long-term car ownership

Consider the Yenisei 2 car, which was sold for 150,000 rubles more than purchased. This car will also not be subject to income tax, because... it was owned for more than 3 years . Tax Code of the Russian Federation, Article 217:

The following types of income of individuals are not subject to taxation (exempt from taxation):
.
17 1) income received by individuals for the corresponding tax period:

• from the sale of real estate objects, as well as shares in the said property, taking into account the specifics established by Article 217 1 of this Code;
• from the sale of other property owned by the taxpayer for three years or more.

Thus, long-term ownership of the car can completely exempt the seller from paying tax.

If 3 years or more have passed between the purchase and sale of the car, the seller does not have to pay tax or file a return.

3. Tax deduction

The owner of a car can count on receiving a tax deduction if he was unable to completely avoid paying taxes using one of the above methods.

This item includes cars Yenisei 3 and Yeniseichik, which were sold for more than they were purchased and were owned for less than 3 years. In addition, the owner of the Yenisei car 1 also applies to this point if he has lost the contract for the purchase of the car.

Article 220 of the Tax Code:

Article 220. Property tax deductions
.
2. The property tax deduction provided for in subparagraph 1 of paragraph 1 of this article is provided taking into account the following features:

1) property tax deduction is provided:
.
in the amount of income received by the taxpayer during the tax period from the sale of other property (except for securities) that was owned by the taxpayer for less than three years, not exceeding a total of 250,000 rubles ;

So, what does a tax deduction of 250,000 rubles ? In this case, 250,000 rubles will be deducted from the cost of the car upon sale, and tax on the sale of the car will need to be paid from the remaining amount.

Yenisei 1: (450,000 - 250,000) * 0.13 = 26,000 rubles.

Yenisei 3: (450,000 - 250,000) * 0.13 = 26,000 rubles.

Yeniseichik (250,000 - 250,000) * 0.13 = 0 rubles.

Please note that a car sold for 250,000 rubles or less is not subject to sales tax. However, keep in mind that a tax deduction in the amount of 250,000 rubles is provided only once a year .

For example, with the simultaneous sale of Yenisei 3 and Yeniseichik cars, the tax amount will be:

(450,000 + 250,000 - 250,000) * 0.13 = 58,500 rubles.

4. Reducing income by the amount of expenses

There is another option for reducing the tax amount - reducing income by the amount of expenses. Article 220 of the Tax Code of the Russian Federation, part 2:

2) instead of receiving a property tax deduction in accordance with subparagraph 1 of this paragraph, the taxpayer has the right to reduce the amount of his taxable income by the amount of expenses actually incurred by him and documented in connection with the acquisition of this property.

This option makes sense to use if the car is sold for more than it was purchased.

The method is well suited for selling the Yenisei 4 car (it was purchased for 350,000 rubles and sold for 450,000 rubles).

In this case, the tax amount will be:

Yenisei 4: (450,000 - 350,000) * 0.13 = 13,000 rubles.

If in the same situation you use a deduction of 250,000, then the tax amount will be significantly higher:

Yenisei 4: (450,000 - 250,000) * 0.13 = 26,000 rubles.

However, there are times when you have to use the second option. For example, if the car purchase agreement is lost and it cannot be provided to the tax office.

Note. Starting from 2019, you can reduce the cost of sale not only by the amount of your own expenses, but also by the amount of expenses of the previous owner. However, this only applies to cases where the car was received by inheritance or as a gift. This issue is discussed in a separate article.

Please note that you cannot take advantage of the 250,000 deduction at the same time (for the same car) and reduce income by the cost of expenses. You are only allowed to select one of the options.

So, once again I will give a list of situations in which tax on the sale of a car may not be paid:

• The cost of the car when selling is less than the cost when buying;
• Owning a car for 3 years or more;
• The car's selling price is 250,000 or less.

In all other cases, you will have to pay tax when selling a car. By the way, starting from 2011, the sale of a car can be carried out according to a simplified scheme, without deregistering the car.

Which tax reduction option should I choose?

The following table shows the best options for the most common situations:

Not in every situation the tax can be reduced to 0, but using the table above you can achieve the minimum payment amount.

Procedure for paying tax when selling a car

Please note that even if, according to your calculations, you do not owe anything to the tax authorities after selling the car, you will still have to file a declaration . The only condition under which you do not need to file a declaration in 2020 is that you have owned the car for more than 3 years.

The tax return for the current year (2019) is due at the beginning of the next year (2020). The deadline for the tax office to accept your return without penalties is April 30 . I recommend filing your declaration at the end of February or beginning of March, because... By the end of March, the season of queues begins at the tax office.

When selling a car, a tax return is filled out using a special program that can be downloaded from the tax office website. Let me emphasize that the program for 2019 will appear only at the beginning of 2020. It makes no sense to use last year's programs, because... Tax laws can change significantly over the course of a year.

In addition to filing a tax return, the car seller must also pay income tax. This can be done either immediately after selling the car or after filing a tax return (but before July 15 ).

Tax on car sales for non-residents of the Russian Federation

The payment of tax on the sale of a car by non-residents deserves special attention. First, let's figure out who is recognized as a tax resident of the Russian Federation (Article 207 of the Tax Code):

2. Tax residents are individuals who are actually in the Russian Federation for at least 183 calendar days over the next 12 consecutive months. The period of stay of an individual in the Russian Federation is not interrupted by periods of his departure outside the territory of the Russian Federation for short-term (less than six months) treatment or training, as well as for the performance of labor or other duties related to the performance of work (provision of services) in offshore hydrocarbon fields raw materials.

All other car sellers in the Russian Federation are not tax residents.

Features of tax payment by non-residents:

• 1. The tax amount is 30 percent of the cost of the car.
• 2. Non-residents of the Russian Federation cannot take advantage of the tax deduction, i.e. must pay tax on the full amount of the sale.
• 3. If a non-resident owns a car for 3 years or more, then he is exempt from paying tax. This clause applies to transactions concluded after January 1, 2019.

Attention! Until January 1, 2019, non-residents of the Russian Federation had to pay tax on the sale of a car even if they owned the car for more than 3 years.

If you sold a car in 2018 or earlier and were not a tax resident of the Russian Federation, then keep in mind that you will have to pay tax on the sale of the car in any case. And its value is 30 percent of the sale price.

So, let's summarize this article :

1. After selling the car, you should choose a method that will minimize the amount of tax.
2. File your tax return by April 30 of the year following the sale.
3. Pay the tax by July 15th of the year following the sale.

I am sure that after reading this article, calculating tax on the sale of any car will not be difficult.

Tax expenses when buying and selling a car: who pays and how much

How is tax deducted on a car purchase, and does the buyer need to pay anything at all? In what cases is the tax levy not charged to the seller? Since the purchase and sale of a car is always an important transaction involving large sums, the size of the payment is of great interest to the seller and the buyer. Let's take a closer look at all the tax issues in this area.

What and when should the buyer pay?

There are no taxes on the purchase of a car in our country, since formally the person who bought the car did not receive additional income. The entire tax burden during the transaction itself should fall on the seller, but not everything is so simple. When re-registering a car, a fee is required; in addition, the buyer now becomes the owner, and now he must pay transport tax. This will need to be done before November next year.

If a car is purchased on the secondary market, both the buyer and the seller must pay transport tax: each of them pays not for the whole year, but for that part of the year when the car was owned. For example, if a transaction is completed in May, the seller pays transport tax for 5 months, and the buyer pays transport tax for the rest of the year.

In addition, buying a car from a dealership also comes with additional tax costs. The motorist pays not only for the car itself; the price of any car dealership includes the costs of VAT and customs duties if foreign cars imported from abroad are sold. As a result, the buyer, albeit indirectly, pays taxes that must be paid by the manufacturer and dealer.

For large transactions, such as the purchase of an apartment, land plot or house in our country, a tax deduction is provided that facilitates income tax this year. Unfortunately, this benefit does not apply to the purchase of even the most expensive cars, so the income tax will have to be paid in full.

How much and when should the seller pay?

The question is often asked: is tax withheld when selling a car? Yes, profit from the sale of a car is considered taxable income. However, such transactions are not subject to a 13% tax in all cases. Important nuances and subtleties:

1. You need to know how much tax is withheld when selling a car. If the transaction price is less than 250,000 rubles, you will not have to pay anything. This is especially beneficial for sellers of used domestic cars, the price of which often does not reach 100,000 rubles. In this case, the seller submits a tax return and an application for a property deduction in the amount of 250,000 rubles, to which any citizen has the right. In this case, the tax amount will be negative, so you will not need to pay anything.
2. The tax is not paid if the car is sold for less than what was paid upon purchase. If the same owner bought a car for 400 thousand and then sold it for 300 thousand, then such a transaction will not be taxed. The fact is that such a sale does not generate income; it only compensates for expenses that have already occurred.
3. Taxes are not paid when selling a car if the car has been owned for more than three years. If you don’t like to change cars often, then you won’t have to pay car tax on the sale. You will not have to submit a declaration for the sale of a three-year-old car, and in this case you will not have any debts.

If the transaction does not fall under any of the above cases, the owner will have to pay tax on the sale. How is it calculated? By law, this fee is 13% of the profit, that is, of the transaction amount. However, in this case the property deduction rule applies. You can subtract 250,000 rubles from the cost of the car, and only the remainder will be taxed.

Calculation example. Citizen A. 2 years ago bought a car on the secondary market. For the subsequent sale, the price was set at 450,000 rubles. Such a transaction brought profit, so it is taxed. A property deduction is made from the total amount: 450,000 rubles – 250,000 = 200,000. A 13% tax is charged on this amount. 200,000 * 13% = 26,000 – the amount of tax that will need to be paid on proceeds from the sale. Knowing what tax is withheld when selling a car, you can choose the most favorable price that will allow you to pay the government and get enough capital for a good car.

Is it possible to avoid taxation?

Even a fairly loyal system seems unfair to many, so many try to bypass taxes by selling a car under some other scheme. The most common solutions and their risks:

• Transferring a car to another person through a general power of attorney. Formally there is no sale, the owner remains the same. However, the holder of the power of attorney may not re-register the car in his own name, in which case the trusting seller will have to continue to pay a considerable transport tax.

In addition, it is the principal who will bear responsibility in the event of an accident if the entrusted car flees the scene of the accident. The car may be smashed and abandoned; in this case, it is impossible to prove that it was not the principal, but a trusted person, who was driving. As a result, an imaginary sale without taxes can cause very serious problems.

• Selling a car under an agreement that specifies a fictitious value below the minimum taxable amount. Such collusion between the seller and the buyer can also lead to serious trouble. If the buyer discovers serious defects and wants to return the car, he will only be able to receive the amount that was in the contract.

Car sales tax

How to calculate and reduce

A car is property. When the owner sells it, he receives income. You have to pay tax on income in Russia, and selling a car is no exception. But car sellers will not always have to give part of their income to the state: sometimes they can avoid paying tax at all, greatly reduce it, or not report the transaction to the state at all and not submit a declaration.

Here's what you need to know if you're selling a car.

What tax is imposed on the sale of a car?

The sale of a car by an ordinary person is subject to personal income tax - personal income tax. Residents of the Russian Federation pay it at a rate of 13%. This is the same tax that is withheld from official salaries or that must be charged when renting an apartment or selling an apartment before the minimum tenure period.

If a car is sold by a company or individual entrepreneur, they pay tax taking into account their taxation system - for example, VAT, income tax or tax on the difference between income and expenses.

When is the sale of a car tax free?

There are cases when the car is sold, money is received for it, but there is no need to pay tax. It depends on the period of ownership, the cost of the car and the type of transaction.

Duration of possession. When an individual sells any property, the minimum period of ownership is taken into account. This is a period after which the owner is not required to file a declaration and pay personal income tax. For cars it is three years.

If the car was bought in 2014 and sold in 2018, there will be no sales tax at all. You also won’t have to report your income to the state. The tenure period must be counted from the date of conclusion of the purchase and sale agreement.

minimum period of ownership of a car for sale without tax

Cost of the car. If you sell a car before the minimum ownership period, you will have to charge personal income tax and file a declaration. But the tax can be reduced using either of two types of deductions. They are available only to residents.

Deductions to reduce personal income tax when selling a car

Type of transaction. If a car is sold under a purchase and sale agreement, the owner receives money for it, this is income. But if the car is transferred under a gift agreement, there is no income. Because the deed of gift is a gratuitous transaction. The owner of the car does not have to file a declaration and pay tax. But the one who receives the gift may have such an obligation: personal income tax must be paid on the cost of the car if it was received as a gift not from a family member or close relative.

Car sales tax calculation

Tax on car sales should be calculated using the formula:

(Income from sale - Deduction) × 13%

Sales revenue is the amount the seller receives. It is specified in the purchase and sale agreement. You can choose the type of deduction at your discretion and use the one that is more profitable.

For example, Ivan bought a used Peugeot 408 in 2016 for RUR 750,000. In 2018, he sold this car for RUB 750,000. The minimum period of ownership has not yet passed, so Ivan needs to file a declaration and calculate personal income tax. His income was 750,000 RUR, but he does not need to pay tax, because there is a deduction - confirmed expenses for the purchase of a car, the same 750 thousand. The tax base should be calculated as follows:

750,000 R − 750,000 R = 0 R

The tax base is zero, and so is the tax. There will be no personal income tax payable in the declaration.

If Ivan had not bought this car, but had inherited it from his father, he would not have been able to confirm the costs of the purchase. But the tax could be reduced with the help of a deduction, which is due even without purchase documents. Then he would calculate personal income tax as follows:

(750,000 R − 250,000 R) × 13% = 65,000 R

Even if you have documents confirming expenses, you can choose a deduction in the amount of RUB 250,000. For example, if you buy a wrecked car for RUB 150,000, and then repair it and sell it for RUB 250,000, it is more profitable to apply a deduction in the amount of RUB 250,000 rather than actual expenses.

Procedure for paying tax on car sales

When selling a car, personal income tax must be calculated and paid independently. Unlike transport tax, this amount is not calculated by the inspectorate and will not be included in the tax notice.

After the seller submits the declaration, he must monitor the deadlines himself, fill out payment documents and pay the tax on time.

Deadlines for paying tax on car sales

Car sales tax must be paid by July 15 of the following year. And only if something has been accrued. When selling after the minimum ownership period, there is no declaration or tax - the seller does not owe anything to the state.

If the tax base according to the declaration is zero, you will not have to pay either.

But if even after applying the deduction there remains an amount to be paid, it must be transferred to the budget before July 15 of the next year. For example, a car was bought in 2018 and sold in 2019. This means that the tax must be paid before July 15, 2020.

You can pay tax through the taxpayer’s personal account, using the details from your card, or using the special “Pay Taxes” service.

A tax payment receipt can be generated on the website nalog.ru. You can pay not only for yourself, but even for third parties from your card

Tax return

If the car was sold before the minimum ownership period, you need to file a tax return. This obligation does not depend on the accrued tax. Even if the deduction has reduced income to zero, the declaration in form 3-NDFL will still have to be filled out and submitted.

Documents for filing a declaration. Proof of income and expenses must be attached to the declaration if they are claimed as a tax deduction. Income can be confirmed by a purchase and sale agreement, and expenses - by an agreement and a receipt from the previous seller or by a check if the car was sold to a car dealership on a trade-in basis.

How to fill out a declaration. You can use any convenient option:

1. By hand or on a computer. Download the form for the corresponding year on nalog.ru.
2. In the "Declaration" program. It can be downloaded from the tax office website and installed on your computer. The completed declaration is printed from the program. Or you can send the file through your personal account.
3. Through your personal account. To do this, you do not need to download forms and programs. In your personal account, you just need to enter the data following the prompts. The declaration is generated in a few minutes - then it can be signed and sent to the tax office.

If the car is sold to an individual, you need to select the appropriate source of income and fill in the buyer’s data. The income code for the sale of the car is 1520. When choosing a deduction, two options are offered with prompts and codes 903 and 906. In the same section, the tax payable will be automatically calculated. This is what the declaration section looks like with tax calculation. The amount of income, deductions and accrued personal income tax is indicated here.

How to submit a tax return. The declaration can be submitted in one of three ways:

1. Personally. Print the completed declaration or enter the data in the blank form by hand. The declaration on paper can be submitted to the tax office in two copies. Take one with an acceptance stamp for yourself - it will confirm that the obligation has been fulfilled.
2. By mail. The completed declaration on paper can be sent to the tax office by mail. There is no need to have your signature certified by a notary. When the tax office receives it does not matter, the main thing is the date of sending.
3. Through your personal account. Declaration forms for filling out are located in the section “Life situations” → “Submit a 3-NDFL declaration”. If you fill out the declaration online, the file will be generated automatically. If the declaration was filled out in the program, you need to attach the finished file and send it to the inspectorate.

In your personal account you can choose the method of sending the declaration

The most convenient way to submit your declaration is online. If you fill it out on paper, you may make a mistake. In your personal account and the Tax Return program, the file is checked before sending: all errors are marked, there are tips for correction. If there are any inaccuracies, they can be easily corrected—you don’t have to fill out all the sheets again. But any method will be legal. The main thing is for the tax office to find out about your income on time.

Tax return filing deadline. A declaration of income when selling a car must be submitted by April 30 of the following year. If the last day falls on a weekend, it is transferred to the next working day. If the car was sold in 2019, the declaration must be submitted by April 30, 2020.

What happens if you don't file a declaration? When selling a car before three years of ownership, a declaration must be filed, even if there is no tax due. If this is not done before April 30 of the next year, the tax office will issue a fine - 5% of the accrued tax for each month of delay, but not more than 30%. If there is no tax, the minimum fine will still be 1000 rubles.

It will not be possible to hide the sale of a car from the tax authorities: it will receive all the data from the traffic police when the new owner registers the car in his name. Or when the seller stops registration so as not to pay transport tax and fines.

Tax on car sales for individual entrepreneurs

If an entrepreneur sells a car, what matters for tax calculation is whether he used the car in business or not. If the car was used for business activities, tax will have to be paid taking into account the specifics of the taxation system that the individual entrepreneur applies. And if this is a personal car of an individual, even with the status of an individual entrepreneur, he pays personal income tax at the usual rate of 13%. This income must be reported according to the 3-NDFL declaration.

Individual entrepreneur on the simplified tax system “Income”. For example, an entrepreneur bought a car for cargo transportation for 1.5 million rubles - this is his business. He pays 6% of total income. Two years later, the individual entrepreneur sells this car for 1.2 million rubles. The entrepreneur will have to include the entire amount of income from the sale of the car in the declaration on the simplified tax system and pay 6% excluding expenses, although he did not make money from the sale. Such an individual entrepreneur is also not entitled to a deduction: they are not provided to entrepreneurs in special regimes. The entrepreneur will pay 72,000 RUR.

The individual entrepreneur tax on the simplified tax system “Income” when selling a car should be calculated using the following formula:

All sales income × 6%

Individual entrepreneur on the simplified tax system “Income minus expenses”. If an entrepreneur takes expenses into account when calculating his basic income, then when selling a car he will be able to deduct the costs of purchasing it from the amount received for the car. But only that part that was not previously taken into account when calculating the tax on the simplified tax system. If previously the purchase of a car has already affected the reduction of the basic tax, it will not be possible to take into account the costs again when selling it.

For example, an individual entrepreneur using the simplified tax system “Income minus expenses” bought a car for cargo transportation for 1.5 million rubles. During his work, he already wrote off part of the purchase costs - only 500,000 RUR. And then the entrepreneur sold this car for 1.2 million rubles. The tax will be calculated using the following formula:

(Income from the sale of a car − (Purchase expenses − Previously written off expenses)) × 15%

The tax on the sale of a car in the example situation will be 30,000 RUR.

IP on OSN. If an entrepreneur sells a car under the general taxation system, he will be able to use regular tax deductions because he pays personal income tax at a rate of 13%. Income can be reduced by expenses by excluding the previously taken into account portion. And if there are no confirmed expenses, a deduction in the amount of RUR 250,000 applies. The general system can be used if the individual entrepreneur works on UTII or a patent, but the sale of the car does not fall under these special regimes, and the individual entrepreneur did not submit an application for simplification. This is exactly the case when using the simplified tax system “Income” is unprofitable, because there are no deductions and expenses cannot be taken into account.

IP on NPD. If an individual entrepreneur applies the preferential special regime “Tax on Professional Income”, the sale of a car will definitely not fall under its scope. Since it is impossible to combine NPA and simplified taxation, the sale of property is subject to tax on the general system. That is, the individual entrepreneur will charge tax at a rate of 13%. And although there is no reporting on the NAP, the cost of the car will have to be declared in the usual way. But the minimum tenure and deductions will apply.

Since 2019, all individual entrepreneurs on OSN and NPD have been allowed not to pay personal income tax when selling a car after the minimum ownership period. There was no such exemption before.

Tax on car sales for non-residents of the Russian Federation

A resident of the Russian Federation is a person who has stayed in Russia for at least 183 days over the next 12 consecutive months. If a resident sells a car, the personal income tax rate for him is 13%. There is also the right to deductions and a minimum holding period.

Non-residents have different tax calculation rules. Moreover, even a Russian citizen can be a non-resident. The main thing here is not citizenship, but the number of days spent per year in the country.

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:

1. Interest was paid under the loan agreement, which was issued to refinance loans intended for the purchase of a residential property or its construction.
2. 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:

1. To pay interest on a loan to build a house or buy land.
2. For the purchase of a residential building or apartment or shares in them.
3. 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:

1. 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.
2. 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.

1. Tax reporting – declaration form 3-NDFL. You can fill it out yourself or using special programs and print it out.
2. 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:

1. Reason for requesting compensation.
2. Information about the car purchase and sale transaction.
3. 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:

1. Purchase and sale agreement (original or certified copy).
2. Papers confirming income and expenses (receipts, checks).
3. Payment certificate.
4. Certificate of ownership of the car.
5. 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:

1. Name.
2. Make and model.
3. Date of issue.
4. 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:

1. A person is still exempt from taxes if he sells the car after using it for more than 3 years.
2. 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.

Taxes on the sale and purchase of cars

The times when private property was prohibited are over, and now every person is free to sell his property as he pleases and to whomever he wishes.

However, according to the law, the profit from any completed transaction (this also includes the sale of a vehicle) must be shared with the state.

This “piece” is not so small - 13%.

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Tax when buying a car

The buyer of a vehicle is not subject . But then you will have to pay for owning and using the car. The regional fiscal tax levied on car owners is a transport tax, which is calculated taking into account the parameters of the car itself and the location, because the rates and procedure for paying TN are established directly by the constituent entity of the Russian Federation. Chapter 28 of the Tax Code of the Russian Federation contains all aspects regulating the payment of this tax.

The obligation to pay transport tax arises from the beginning of the month in which the car was purchased . The starting point is the moment when the deal was concluded and the purchase and sale agreement was drawn up. The tax service does not care when exactly the new owner applied to the traffic police and registered the vehicle; what is important is the fact of the change of owner and the date of the agreement, but when calculating the tax, the full month is taken into account.

There are no other taxes when purchasing a car . The buyer of the vehicle will not be able to receive a tax deduction only upon the subsequent sale of this car, for which he will need to save documents about the transaction for the purchase of the car. The tax burden lies with the car seller.

What taxes must be paid when selling a vehicle?

Sales of vehicles are subject to tax . For individuals (as well as for entrepreneurs when selling personal vehicles) - this is income tax (personal income tax in the amount of 13%), for individual entrepreneurs selling commercial vehicles used in business activities and working under the general tax system - and personal income tax (13%) , and VAT (18%).

If an individual entrepreneur operates under the “simplified” system, he does not pay these taxes, and the income from the transaction is included in the tax base for calculating the tax in the amount of 6% of income or 15% of “income minus expenses.”

Profit received from the delivery or sale of a vehicle is subject to personal income tax - the notorious thirteen percent (Chapter 23 of the Tax Code of the Russian Federation and letter of the Ministry of Finance No. 03-05-06-04/66762 dated December 24, 2014). This applies to all citizens who live on the territory of the Russian Federation for more than one hundred eighty-three days a year.

If this period is shorter, this affects the tax rate - it will already be thirty percent. Anyone who sells their vehicle is required to independently calculate the amount of “tribute” and submit a declaration to the Federal Tax Service for the next year after selling their car.

There is no need to pay the state and not notify it about the transaction if:

• you have documents that you are selling the car for less than you purchased (or you sold it for less than two hundred and fifty thousand rubles);
• you have owned the car for more than three years (Article 217 of the Tax Code).

What to do if we are not talking about a car, but, say, a bicycle, motorcycle or ATV? It depends on how much it was sold for.

Tax amount if the car is sold for more than it was bought for

What are the taxes on cars sold by proxy and how much should I pay if the car is sold for more than it was bought for? As already mentioned, thirteen percent of the profit from the sale of the car should be transferred to the state treasury (Article 224 of the Tax Code). A declaration of income is also submitted to the local branch of the Federal Tax Service. Moreover, it is submitted in any case, even if you have proven that you did not make any profit from the sale. The tax amount is calculated independently.

For example, a certain person sold a car for half a million Russian rubles. In this case, the state will have to pay 65 thousand rubles. Does this entire amount need to be given away? The following factors influence this :

• How big is the seller's benefit?
• how long the car was owned before the sale;
• tax deduction.

For example , a car bought for five hundred thousand rubles was sold four years later for 600,000. It would seem that there is a benefit.

Does the age of a car affect taxation when selling and buying?

The year of manufacture of a car affects not only its market value and liquidity . The age of the vehicle is also taken into account for tax purposes. Moreover, it is significant for both the buyer and the seller.

For someone who purchases a vehicle, its age will affect the amount of transport tax for owning a car.

According to paragraph 3 of Art. 361 of the Tax Code of the Russian Federation, regional authorities are given the right to differentiate transport tax rates in accordance with the age of the car.

Subjects of the Russian Federation enjoy this right; for example, in a number of regions the following coefficients on average are established for the tax rate for technical tax depending on the useful life of the car:

• 1 – for cars under 5 years of age;
• 1.75 – 5-10 years;
• 2 – 10-15 years;
• 3 – more than 15 years.

However, there is another side: transport tax benefits are usually provided to various categories of car owners who own cars of considerable age - from 15 years.

This is stated, in particular, in the law on TN in St. Petersburg.

For this reason, you need to carefully study local legislative acts in order to know for sure whether it is profitable in your locality or region to purchase new or used cars and maintain them while paying transport tax.

The age of the car when sold will not directly affect the amount of personal income tax, but only indirectly:

• the price of the vehicle depends on the year of manufacture and condition, and therefore the amount of income received from the transaction;
• The age of the car to a certain extent affects the period of ownership of the car; if it has just recently left the assembly line, it cannot be owned by the seller for more than 3 years, so the tax will need to be paid, otherwise, when a used car has been owned by one owner for many years, you can avoid fiscal burden .

Declaration when selling a car

If you rented out or sold a car, you need to notify the state about this in your tax return in Form 3-NDFL. You can fill out the appropriate form by hand, or you can submit it electronically. The document must be submitted by the seller to the Federal Tax Service office at the place of residence no later than April thirtieth of the following year. This, however, does not apply to a tax deduction application - it can be submitted at any time of the year.

As Article 11 of the Tax Code states, the place of residence is the address at which an individual is registered. If a person is not a citizen of the Russian Federation, the place of stay is determined in accordance with his request.

Place of residence of an individual - the address (name of a subject of the Russian Federation, district, city, other populated area, street, house number, apartment) at which the individual is registered at the place of residence in the manner established by the legislation of the Russian Federation.
If an individual does not have a place of residence on the territory of the Russian Federation, for the purposes of this Code, the place of residence may be determined at the request of this individual at the place of his residence. In this case, the place of residence of an individual is recognized as the place where the individual resides temporarily at the address (name of a subject of the Russian Federation, district, city, other populated area, street, house number, apartment) at which the individual is registered at the place of stay in the manner established legislation of the Russian Federation; (as amended by Federal Laws dated December 23, 2003 N 185-FZ, dated July 27, 2010 N 229-FZ)

According to Article 88 of the Tax Code, submitted documents are reviewed by the Federal Tax Service within three months.

Deduction when selling a car

The property tax deduction is only available to individuals for income taxes. The seller of the vehicle will be exempt from the obligation to pay personal income tax if the following conditions are met:

• the car has been owned by the owner selling it for more than 3 years;
• the cost of movable property (vehicle) does not exceed 250 thousand rubles, although the seller owned it for less than 3 years (clause 1.1 of Article 220 of the Tax Code of the Russian Federation).

In this case, the vehicle must be used exclusively for personal purposes - if it was used to conduct business, the seller does not have the right to a deduction .

In other words, if you decide to sell your vehicle , it is better to comply with the law and not try to “simplify” the procedure, for example, by drawing up a power of attorney.

It may well turn out that the person to whom you entrusted your car turned out to be unworthy of your trust .

When filing a tax return, if you are not confident in your literacy, it is better to seek the services of a specialist - he will quickly and competently prepare your documents and all that is required of you is to submit them to the tax office and calmly expect a tax deduction.

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