Are insurance payments under CASCO taxable?

Are insurance payments under CASCO subject to personal income tax?

What are the rules for calculating and paying personal income tax when receiving insurance payments under CASCO?

Insurance payments, including MTPL and CASCO, paid in the Russian Federation and by foreign organizations outside Russia, are listed among the income that is subject to personal income tax (clause 2, clause 1, clause 2, clause 3, Article 208 of the Tax Code).

Insurance payments are divided into payments under compulsory insurance contracts and payments under voluntary property insurance contracts.

A defines the features of calculating the tax base under insurance contracts, Art. 213 NK.

For CASCO insurance, a VOLUNTARY insurance contract is signed. Insurance payment under a CASCO policy is subject to personal income tax (clause 4 of Article 213 of the Tax Code).

Under such an agreement, including civil liability insurance (CL) for damage to the property of third parties and (or) civil liability insurance for vehicle owners, upon the occurrence of an insured event, the taxable income of an individual is established in the following cases (clause 4 of Article 213 of the Tax Code)

Death or destruction of insured property, including third parties, as the difference between the insurance payment issued and the market value of the insured property on the date of conclusion of the contract (on the date of occurrence of the insured event - under the civil defense insurance contract), increased by the paid insurance premiums

As a result, the price of the vehicle consists of the market price of the vehicle on the date of concluding the insurance contract or the date of occurrence of the insured event - under the civil insurance contract, plus the contributions made by the individual - the cost of CASCO insurance.

Damage to the insured property of the owner or third parties as the difference between the insurance payment issued and the cost of repairing the vehicle, if no repairs were carried out, or the cost of repairing the vehicle, if repairs were made plus insurance premiums paid

In other words, expenses are the cost of repairs plus the cost of CASCO insurance if there was no repair, or the cost of repairs if there was one, plus the cost of CASCO insurance.

Confirmation of expenses for repairs that have not yet been completed is required using a calculation, conclusion, report from an insurer or an independent expert.

Documents such as:

Agreement (copy) on work performed
Acceptance certificate for completed work
Payment documents

Expenses reimbursed to the policyholder for investigating the circumstances of the insured event, determining damage, court costs and others are not taken into account in income.

Insurance indemnity is intended to compensate for losses from an insured event, and cases of insurance indemnity exceeding the damage received occur infrequently.

But if this happens, then the insurance company is obliged to calculate and withhold personal income tax on such income, since it is a tax agent.

You can read about this in detail here , but the attached answer is not normative.

If this does not happen, then the obligation to declare income and pay the accrued tax falls in full on the owner of the vehicle - the recipient of the insurance compensation (clause 4, clause 1, article 228, clause 1, article 229 of the Tax Code of the Russian Federation).

Let us recall that in connection with the recently introduced obligation of banks to report to the relevant accounting and control authorities about the receipt of funds in bank, including card, accounts of individuals, the Federal Tax Service Inspectorate in 2015 began mass mailings of letters to individuals who received insurance compensation in 2014 for damaged vehicles, with the requirement to declare income and pay personal income tax by April 30.

We believe that this fact indicates that insurance companies do not perform the role of a tax agent, which creates the need to declare income from insurance compensation personally by taxpayers. Therefore, we are ready to help individuals correctly fill out declarations in Form 3-NDFL and avoid taxation if such individuals have documents confirming their expenses.

The letter of the Ministry of Finance dated 02/16/2017 N 03-04-06/8960 indicates a situation when an agreement concluded by a company with an insurance organization provides for comprehensive insurance of a car with technical equipment (CASCO), under which the beneficiary of the car insurance is the individual, and in part equipment insurance company.

At the same time, insurance premiums (premiums) paid by the company for individuals, in addition to insurance premiums (premiums) for risks associated with installed technical equipment, are taken into account when determining the tax base for personal income tax. The company has responsibilities as a tax agent.

AAA-Invest specialists will provide you with the services of filling out a declaration in Form 3-NDFL and help you optimize taxation

Do I need to pay personal income tax on insurance payments?

Please explain, if you receive an insurance payment in cash after a fire or under comprehensive insurance, do you need to pay personal income tax and in what amount and order?

Under the tax code, insurance payments are considered income and may be subject to taxation. True, there are exceptions, and in life situations when you have to pay personal income tax on payments are very rare - as is the case with personal income tax on bank deposits.

What insurance payments are not subject to personal income tax?

Some insurance payments are not taken into account when determining the tax base. These are payments for:

OSAGO and other compulsory types of insurance.
Voluntary life insurance.
Voluntary personal insurance.
Voluntary pension insurance.

If you receive an insurance payment under such contracts, you will not have to pay personal income tax.

However, there are nuances. Thus, when terminating a voluntary pension insurance contract, the insurance organization pays the redemption amount. If it turns out to be more than the amount of insurance premiums, tax will be withheld from the excess amount.

At the same time, the insurance organization will also withhold personal income tax from the amount of social tax deduction under this agreement, that is, 13% of contributions up to 120 thousand rubles for each year of the agreement, even if the policyholder did not receive this deduction. To prevent this, you must provide the insurance organization with a certificate from the Federal Tax Service stating that the deduction was not provided or was provided in a certain amount.

Personal income tax on payments for voluntary property insurance

If you insure your home, other property, or take out a comprehensive insurance policy for a car, you may be required to pay personal income tax on the insurance proceeds. Maybe, but it’s not a fact that it will be required: this rarely happens.

According to paragraph 4 of Art. 213 of the Tax Code, the tax base arises when the insurance payment is greater than the value of the destroyed property or the cost of restoring the property plus the cost of the policy.

Example. The dacha and movable property in it were insured for 5 million rubles, the policy cost 10 thousand. There was a fire, the dacha burned to the ground along with furniture and other property. The cost of the dacha and movable property is 4 million rubles. If the insurance company pays 5 million, the tax base will be 990 thousand - money in excess of the value of the property and the cost of the policy. You must pay personal income tax in the amount of 128,700 rubles.

In practice, the insurance company pays the policyholder only compensation for actual damage. That is, you won’t be able to make money on insurance, and there is no point in insuring property for more than it actually costs.

In the example above, the insurance company will reimburse the policyholder 4 million rubles, from which personal income tax is not charged: compensation for damage is not taxed.

Fines, penalties and moral damages

It happens that the insurance company transfers compensation late or there is a disagreement between the policyholder and the insurer regarding the amount of payment. You have to go to court, and the court may oblige the insurance company to pay a fine and penalty to the policyholder.

From the point of view of the Supreme Court, fines and penalties are income on which taxes must be paid. The Ministry of Finance even issued letters of clarification. But compensation for moral damage and reimbursement of legal expenses are not subject to personal income tax.

Keep in mind that all this applies not only to payments from insurance companies, but in general to cases of violation of consumer rights.

There is a possibility that you will have to pay personal income tax on income in the form of fines and penalties yourself. Even if an organization or individual entrepreneur, that is, a tax agent, loses to you in court, he himself will withhold personal income tax from the payment only if the court decision indicates what amount this should be. But he will inform the tax office that personal income tax was not withheld, and then it’s up to you.

The most important

1. Payments for many types of insurance are not taxed. These are MTPL, voluntary life insurance, voluntary personal insurance, voluntary pension insurance. But there are nuances.

2. Tax will have to be paid on payments under voluntary property insurance contracts such as comprehensive insurance or real estate insurance only if the payment is greater than the actual damage. Such situations are unlikely. The damage compensation itself is not subject to tax.

3. If someone, for example an insurance company, pays a fine and a penalty to the consumer by court decision, you must pay personal income tax on these amounts. Payments for moral damages and compensation for legal expenses are not taxed.

Receiving an insurance payment under CASCO may require you to pay personal income tax

Question from Klerk.Ru reader Natalia (Chelyabinsk)

An employee of our organization received insurance payments under CASCO. Should the employee pay personal income tax on the amount received? If yes, at what rate and within what time frame?

In accordance with paragraph 4 of Art. 213 of the Tax Code of the Russian Federation under a voluntary property insurance agreement (including civil liability insurance for damage to the property of third parties and (or) civil liability insurance for vehicle owners), upon the occurrence of an insured event, the taxpayer’s income subject to taxation is determined in the following cases:

loss or destruction of the insured property (property of third parties) as the difference between the amount of the insurance payment received and the market value of the insured property on the date of conclusion of the specified contract (on the date of occurrence of the insured event - under the civil liability insurance contract), increased by the amount of insurance paid to insure this property contributions;

damage to the insured property (property of third parties) as the difference between the amount of insurance payment received and the costs necessary to repair (restore) this property (if no repairs were carried out), or the cost of repair (restoration) of this property (if repairs were carried out ), increased by the amount of insurance premiums paid to insure this property.

The validity of the costs required to carry out repairs (restoration) of the insured property in the event that repairs (restoration) were not carried out is confirmed by a document (calculation, conclusion, act) drawn up by the insurer or an independent expert (appraiser).

The validity of the costs of repairs (restoration) of the insured property is confirmed by the following documents:

1) an agreement (a copy of the agreement) on the performance of relevant work (on the provision of services);

2) documents confirming acceptance of work performed (services provided);

3) payment documents drawn up in the prescribed manner, confirming the fact of payment for work (services).

At the same time, the amounts reimbursed to the policyholder or expenses incurred by insurers incurred in connection with the investigation of the circumstances of the occurrence of the insured event, establishing the amount of damage, legal expenses, as well as other expenses incurred in accordance with the current legislation and the terms of the property insurance contract are not taken into account as income.

If, when paying insurance compensation under voluntary property insurance contracts, a tax base arises, determined in accordance with paragraph 4 of Article 213 of the Tax Code of the Russian Federation, then the responsibility for calculating, withholding and paying personal income tax on such income to the budget rests with the tax agent - the insurance company.

An individual beneficiary is not obliged in this case to submit a personal income tax declaration (Letter of the Federal Tax Service of Russia for Moscow dated April 30, 2009 N 20-14/3/043196@).

If the tax agent did not withhold tax, then the individual recipient of the insurance compensation is obliged to submit a tax return to the tax authority at the place of registration no later than April 30 and pay the tax by July 15 of the year following the year in which the income was received at a rate of 13 percent (Clause 4, Clause 1, Clause 3, 4, Article 228 of the Tax Code of the Russian Federation, Clause 1, Article 224 of the Tax Code of the Russian Federation).

It’s very easy to get a personal consultation with Svetlana Skobeleva online - you just need to fill out a special form . Several of the most interesting questions will be selected daily, the answers to which you can read on our website.

The Ministry of Finance reminded in which case insurance payment under CASCO is subject to personal income tax

If the insurance company's payment exceeded the cost of repairing the car, increased by the amount of insurance premiums paid, then the excess amount is subject to personal income tax. In this case, the tax must be calculated and withheld by the insurance company. Such clarifications are contained in the recently published letter of the Ministry of Finance dated April 30, 2014 No. 03-04-05/20579.

This is a common situation. The individual’s car was involved in an accident, and therefore the insurance company paid the amount necessary for repairs. Is the amount of insurance compensation received subject to personal income tax?

Officials recalled that the specifics of determining the tax base when calculating personal income tax under insurance contracts are established by Article 213 of the Tax Code of the Russian Federation.
Paragraph 4 of this article states: in the event of damage to the insured property, taxable income is equal to the difference between the amount of insurance payment received and the costs necessary to repair this property (if repairs were not carried out), or the cost of repairs, increased by the amount of insurance premiums paid to insure this property. At the same time, the insurance organization is recognized as a tax agent, and, accordingly, is obliged to calculate and withhold personal income tax from payments (clauses 1, 2 of Article 226 of the Tax Code of the Russian Federation). If the amount required for future repairs of the car (the cost of the repairs performed), increased by the amount of insurance premiums paid, exceeds the amount of the insurance payment, then personal income tax is, of course, not withheld from the amount of the insurance payment.

Tax on payments under CASCO

Hello, regarding the essence of the question you asked, we can clarify the following.

According to Part 1 of Art. 207 of the Tax Code of the Russian Federation (hereinafter referred to as the Tax Code of the Russian Federation), taxpayers of the personal income tax (hereinafter in this chapter - taxpayers) are individuals who are tax residents of the Russian Federation, as well as individuals receiving income from sources not in the Russian Federation who are tax residents of the Russian Federation.

By virtue of paragraph 2 of Art. 208 of the Tax Code of the Russian Federation, income from sources in the Russian Federation includes insurance payments upon the occurrence of an insured event, including periodic insurance payments (rents, annuities) and (or) payments related to the participation of the policyholder in the investment income of the insurer, as well as redemption amounts received from a Russian organization and (or) from a foreign organization in connection with the activities of its separate division in the Russian Federation.

In accordance with Part 1 of Art. 213 of the Tax Code of the Russian Federation, when determining the tax base, income received by the taxpayer in the form of insurance payments is taken into account, with the exception of payments received:

1) under compulsory insurance contracts;

2) under voluntary life insurance contracts;

3) under voluntary personal insurance contracts providing for payments in the event of death, injury to health and (or) reimbursement of medical expenses of the insured person (with the exception of payment for the cost of sanatorium and resort vouchers);

4) under voluntary pension insurance contracts concluded by individuals in their favor with insurance organizations, upon the occurrence of pension grounds in accordance with the law

According to Part 4 of Art. 213 of the Tax Code of the Russian Federation under a voluntary property insurance agreement (including civil liability insurance for damage to the property of third parties and (or) civil liability insurance of vehicle owners), upon the occurrence of an insured event, the taxpayer’s income subject to taxation is determined in the following cases:

- loss or destruction of the insured property (property of third parties) as the difference between the amount of the insurance payment received and the market value of the insured property on the date of conclusion of the specified contract (on the date of occurrence of the insured event - under the civil liability insurance contract), increased by the amount paid for the insurance of this property insurance premiums;

- damage to the insured property (property of third parties) as the difference between the amount of the insurance payment received and the costs necessary to repair (restore) this property (if repairs were not carried out), or the cost of repair (restoration) of this property (if repairs), increased by the amount of insurance premiums paid to insure this property.

The validity of the costs of repairs (restoration) of the insured property is confirmed by the following documents:

1) an agreement (a copy of the agreement) on the performance of relevant work (on the provision of services);

2) documents confirming acceptance of work performed (services provided);

3) payment documents drawn up in the prescribed manner, confirming the fact of payment for work (services).

Thus, we can conclude that when paying insurance compensation under a voluntary vehicle insurance agreement (CASCO), it is required to pay income tax for an individual.

In this case, the tax, in case of damage to the car, must be calculated from the difference between the amount of the insurance payment received and the costs necessary to repair (restore) the car (if no repairs were carried out), or the cost of repair (restoration) of this property (if repairs), increased by the amount of insurance premiums paid to insure this property.

The tax base does not include compensation for costs of assessment, power of attorney, legal services, compensation for moral damage, a fine in favor of the consumer and a penalty for failure to comply with the consumer’s requirements voluntarily.

For more detailed advice on your personal situation, we recommend that you contact the reception office of lawyer Sergei Sergeevich Ivlev at the address: Orenburg, st. Shevchenko, 20 V, office 414 and by phone 8-912-343-72-22.