Is there a tax deduction when buying a car?

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:

1. Regular purchase . In this case, the time of car ownership will be counted from the very moment of purchasing the car.
2. Inheriting a vehicle . In this case, the beginning of ownership is the day of death of the former owner.
3. 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:

1. 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.
2. 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.
3. 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 deduction when buying a car

In Russia there are several categories of deductions that are provided to people under certain conditions. They are divided into four groups: standard, social, property and professional. The motor vehicle is the property of the taxpayer. In this regard, citizens have a question about whether it is possible to return tax on the purchase of a car.

Legislative regulation

The rules for granting property tax deductions are regulated by Article 220 of the Tax Code of the Russian Federation. According to Part 1, the taxpayer has the right to return previously paid income tax when purchasing the following objects:

• a plot of land with buildings located on it;
• apartments, houses or shares in residential premises;
• building your own home.

If a person borrowed funds from a bank to purchase or construct an object, then he has the right to issue a deduction for the amount of mortgage interest actually paid, but not more than 3 million rubles.

Note: Tax refunds on car purchases are not provided for in the Tax Code of the Russian Federation.

Even if vehicles were purchased using borrowed funds from a bank, reimbursement of costs for paying interest on a consumer loan is not provided for by law.

This is primarily due to the fact that the deduction is provided only for the purchase of socially significant items. A car is considered a luxury item.

Selling a vehicle

Citizens of the Russian Federation are required to pay personal income tax on all income. Including when selling your own property. Tax preferences are provided to the car seller, not the buyer.

To pay personal income tax, you must submit a 3-NDFL declaration to the tax authority by April 30. The tax itself must be paid by July 15.

The amount of the benefit when selling a car depends on the period of ownership of the property:

• over 36 months – no tax is paid;
• up to 3 years – 250 thousand rubles.

Example 1: Ivanov bought Lexus in 2012 for 1.2 million rubles. In 2018, he sold it for 800 thousand. The tenure period was 6 years. A citizen does not have to pay tax on income received from the sale of a car.

Example 2: Malkov bought a Lada Granta in 2016 for 570 thousand rubles. A year later, he sold the car for 600 thousand. The tenure was less than 3 years. In this case, he must pay income tax. The income in this example is 30,000 (600,000-570,000). This amount must be multiplied by 13%. The total amount to be paid is 30,000*13%=3,900 rubles.

Example 3: Lovchikov bought a Priora in 2017 for 300 thousand rubles. In 2018, he sold it for 150 thousand. The tenure was less than 36 months. But in this case the tax is not paid, since the income is less than 250,000 rubles.

Important to know: Even if the amount of calculated tax is zero, a citizen still needs to submit a 3-NDFL declaration to the tax office. If this is not done, a fine of 1,000 rubles will be imposed on the taxpayer.

How to calculate tenure

To determine whether you need to pay tax or not, you need to correctly calculate the period of ownership of the vehicle. The start date of ownership is calculated according to the basis document.

The following documents may serve as the basis for registration of rights to a car:

• contract of sale;
• deed of gift;
• certificate of inheritance.

The date on which the document is dated is the date from which the period of ownership should be calculated.

How many times can the benefit be used?

The state does not limit the number of transactions with motor vehicles, but it regulates the amount of benefits for one reporting period - a year. That is, a deduction of 250 thousand rubles can be used several times in your life. But, if a person sold several cars during one calendar year, then the total tax discount cannot exceed 250,000.

For example: Sevryukov sold a car in January 2018 for 150 thousand. Then in August he sold another vehicle for 400 thousand. The tax will be calculated as follows (100000+400000-250000)*13%=32500.

Planned changes in legislation

Due to the fact that the cost of vehicles is often equal to the price of the property, the State Duma is developing a bill on tax refunds on car purchases.

This benefit will be available if a number of requirements for the vehicle are met. The vehicle must be:

• new;
• domestic or produced on the territory of the Russian Federation.

It is also planned to set a limit on the maximum amount with which the benefit will be calculated.

Useful: The maximum amount when purchasing a car, within which personal income tax can be returned, will be set at 500 thousand rubles. The amount to be refunded will be 65 thousand (500000*13%)

The preference will be presented to the citizen once, that is, repeated application for a deduction is not provided for in the bill.

This bill is aimed at stimulating consumers to purchase domestic cars and maintaining the Russian automotive industry.

Hiding taxes

If the seller thinks that failure to submit a declaration will save him from having to pay tax, then he is deeply mistaken. All information from the traffic police is transferred to the Federal Tax Service via electronic interaction. Thus, failure to submit 3-NDFL threatens not only a fine, but also penalties for late payment of the tax fee.

Another fraud scheme is the deliberate underestimation of the car sales price in the contract. That is, the documents indicate a cost of less than 250 thousand for the purpose of applying deductions and tax evasion. If information about such a transaction reaches the supervisory authorities, then in addition to an administrative fine, the conspirators will face criminal liability.

Fact. Today in Russia there is no tax deduction when buying a car. At the same time, there are a number of benefits for the sale of vehicles.

Perhaps in the near future the situation will change and the return of personal income tax from a purchased vehicle will become as commonplace as a deduction for the purchase of an apartment.

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How to get your tax deduction back when buying a car in 2019

Making large purchases is legally beneficial: if an item is considered necessary, then you can get a tax deduction for it. This applies to living space, medical services and other expensive things that are important to life. The car does not directly fall into this category, but you can still receive compensation if you comply with the conditions.

Basic Rules

The tax deduction is a refund of the 13% tax that we usually pay on income when officially employed. This is often done by the employer himself, the main condition: a “white” salary and a job according to all the rules. Since a conscientious citizen pays taxes, he can receive an equivalent percentage compensation if he makes large purchases. Most often this applies to large acquisitions. Some tax deductions can only be received once in a lifetime: for example, when buying a home.

Any person who officially works and pays taxes, and has made essential budgetary purchases within one calendar year, can receive compensation. These include important property, education or medical expenses: for example, operations or dental services. Despite the fact that a car is considered property and is worth a lot, it is not on the list of things for which you can get a tax deduction. That is, it will not be possible to directly receive compensation for buying a car. The law specifies the possibility of payment for:

• purchase and construction of real estate;
• charity;
• treatment;
• transactions with securities;
• investments in pension funds.

There are restrictions on receiving tax deductions for different categories. Its value in any case is 13%, as is the amount of income tax. The maximum compensation is for an apartment, where you can get up to 260 thousand rubles.

Purchase on credit

By law, taxpayers have the opportunity to reduce their expenses by obtaining loan funds that will be used for important expenses. Article 220 refers to the repayment of interest on funds borrowed from the bank for payment or refinancing. True, this concerns only the housing issue. The law does not mention a car. Consequently, even for loan funds to purchase a car, you will not be able to get a deduction.

The only benefit that can be officially obtained for buying a car is the state lending program. It is aimed at stimulating demand for cars that were produced and assembled in Russia.

These include not only the domestic auto industry, but also foreign cars that were produced within the country. There are certain restrictions: for example, the cost of the car should not exceed 1.5 million rubles. A discount on a loan is provided only for urgent interest. In addition, the car must be new and purchased at an official dealership.

According to the state program, you can get a discount (1/10 of the cost of the car) when purchasing a car for the first time or purchasing a car for a family with more than two children.

You cannot receive a tax deduction in the form of 13%, but you can explore the prospects and take advantage of existing lending programs that will help you purchase a car at a profit. Such discounts and benefits are even more profitable than deductions, since they apply to citizens regardless of whether they have an official position or a “white” salary.

Prospects in legislation

Discussions about including a car in the list of necessary things are held regularly. Still, for many families this is as important a purchase as housing. You need to go to work, take your children to school: often the costs of public transport are much higher than for personal transport. Such proposals are regularly submitted for discussion. For example, deputies proposed introducing such compensation for residents of the Far East. According to the proposal, it will be provided only once every 5 years and after registering the car with the traffic police. It is proposed to set the limit at one million rubles, that is, the maximum payment amount will be 130 thousand if such a proposal is accepted.

According to other information typical for the central part of the country, it is proposed to introduce a deduction with a maximum amount of 60 thousand rubles and only for the purchase of domestically produced cars. Now a similar system operates with the state lending program. And the amount that can be saved is greater, so there is no urgent need for such an initiative.

Selling with profit

However, there is a chance to receive at least some compensation for transactions with the machine. If you are going to sell it, you will have to pay income tax to the state. It is equal to 13% of the transaction amount. But this rule only applies to those who are parting with a new car that is less than three years old from the date of manufacture.

You will have to pay tax if you sell for more than you buy. The difference should be more than a quarter of a million in favor of the seller. This rarely happens in practice: cars usually become cheaper, not increase in price.

Selling is more expensive than buying

You can get around the benefit rule using documented costs that occurred during the operation of the car. For example, you completely changed some parts, improved the quality of the purchased car, thereby increasing its value, but wasting your money. In this case, by selling it for more than the original price, you can count on a discount. To do this, you need to save receipts and checks confirming the fact of your investment in the car. The discount is calculated using the formula:

(sale amount - purchase amount) × 0.13

For example, you bought a car for 1,200,000 rubles. During the work, improvements and repairs were carried out, which increased the cost of the car to 1,500,000 rubles, which you propose to pay the buyer. The benefit in this case will be more than 250,000, you will need to pay income tax. But if you have receipts, you can save 39,000 rubles.

Settlement

Another way to save on taxes is suitable for few: it requires, first of all, large expenses. To take advantage of the offset principle, you need to buy an apartment or house within 12 months and at the same time sell a car. The principle is simple: when selling a car you will have to pay 13%, but when buying an apartment you can receive equal or even more significant compensation. But there are several nuances here. Firstly, you need to have the right to a tax deduction, and not everyone has it. Secondly, such a combination is only possible once in a lifetime, since each citizen can only receive one real estate tax deduction.

For example, you buy an apartment and a car worth a million. In this case, the compensation is equal to the tax that is required to be paid, thus one is offset against the other. If the purchase amounts are different, then the amount of compensation can be calculated using the formula:

cost of housing × 13% – (cost of car - 250,000) × 13%

1. For example, you bought a car for 1,200,000. The tax will be (1,200,000 - 250,000) × 13% = 950,000 × 13% = 123,500 rubles.
2. The tax deduction for an apartment worth 2,000,000 rubles will be 2,000,000 × 13% = 260,000 rubles.
3. The difference between tax and deduction: 260,000 - 123,500 = 136,500 rubles.

The buyer remains in the black: he will receive part of the compensation for the apartment, but will not have to pay tax on the car. The rule applies only to cars that have been owned for less than three years, since older cars already have a benefit: you do not need to pay compensation for them.

Low price

If your benefit from buying a car is less than 250,000 rubles, then you will not need to pay tax. To confirm, you need certificates and receipts confirming the absence of a special benefit. You can use this right one-time, that is, if you sell 5 cars with a profit of less than a quarter of a million, you can get a tax break for only one of them. For the rest, you will have to pay compensation to the state.

Old car

In cases where you have owned the car for more than 3 years, the entire amount is not subject to tax: you can simply sell it and pay nothing. This benefit applies to any car, regardless of the purchase and sale price, even if you sell with a profit of more than 250 thousand rubles. You don't have to fill out a return, fill out paperwork, or include checks. So it’s most profitable to sell used cars: you won’t have to pay any money to the state treasury for them.

The period is counted from different points, depending on the method of acquisition. For example, if you bought a car, the day of purchase is taken into account. When received as a gift - the day of gifting. And in cases where a car is inherited, the starting day is your entry into the rights of an heir, even if before that the car belonged to your family for several years.

Calculation example

Let's imagine that you are selling a relatively new car that you have used for a year. Purchase price: 500,000 rubles, sale price 650,000 rubles. You still have the receipts and the purchase agreement. You can pay tax on expenses or use the standard deduction, which is valid for different categories. In the first case, the tax amount is calculated using the formula: (sale price - purchase price) × 13%, that is, (650,000 - 500,000) × 13% = 150,000 × 13% = 19,500.

If you use the deduction mechanism, the taxable amount will be calculated using the formula: (sales price - 250,000) × 13%, that is, (650,000 - 250,000) × 13% = 52,000. This is much more than the usual deduction, so it is wiser to use standard scheme with payment of income tax.

There are more complex schemes. For example, your family has 2 cars that were purchased within two years and sold in one year. The first car was sold for 200,000 rubles, the second - for 500. The income from the transaction amounted to 700,000. Since everything happened within 12 months, one tax deduction is applied to them: (700,000 - 250,000) × 13% = 450,000× 13% = 58,500 rubles.

But if these same cars were sold within a year of each other, the picture would look different. For the first car, the amount of income is less than the lower taxable threshold: (200,000 - 250,000) = - 50,000. Therefore, there is no need to pay the state. And for the second you will have to pay the following amount: (500,000 - 250,000) × 13% = 250,000 × 13% = 32,500 rubles. That is, it is more profitable to sell both cars at different times, so as not to pay at all for the first, and to pay a smaller amount for the second.

Paperwork

To receive a deduction, discount or compensation when selling a car, you need to fill out documents. It is better to save all receipts and receipts, as well as the contract for the purchase of the car and information from the previous owner. This is necessary so that there is evidence in case the price was inflated by the previous buyer. You can submit documents to the tax office in person or through the MFC. The list includes:

• passport, individual taxpayer number;
• declaration in form;
• vehicle documentation;
• contract;
• checks, receipts, agreement details.

All this must be submitted along with a certificate of income by the end of April, so as not to receive a penalty for being late. The year of filing is the year following the year of sale. That is, if you sold the car in January 2019, you must submit it by April 30, 2020. You will need to pay the tax by July 15, the year of filing the declaration. That is, as in our example, until July 15, 2020.

Possible mistakes

When selling a car, many people violate the established rules, which can lead to unpleasant consequences and loss of funds. Typically, such mistakes are made either due to ignorance of the rules, or in an attempt to avoid paying taxes, which usually brings more problems than benefits. There are two common mistakes: refusal to fill out a declaration and underestimating the price.

When selling a car less than three years old, you must fill out a declaration form. It shows the profit you made from the sale of the car. If the IRS doesn't notice this fact, you'll be lucky. But if the deception is revealed, you will lose more than you gain. For such a violation, a fine and penalties for concealing the transaction are imposed. And the 13% income tax itself, which you wanted to avoid in this way, will still have to be paid. So it’s better not to take risks and do everything according to the rules.

Since you don’t have to pay tax when receiving a benefit of less than 250,000 rubles, many people deliberately underestimate the cost of the car in their documents. As a result, it may be difficult to cancel the transaction. The deception may be revealed during a re-sale if the new owner wants to receive the entire market value of the car. Thanks to the understatement, it will significantly exceed the purchase amount indicated in the documents. Such a gap will be impossible not to notice.

It is not possible to receive a tax deduction for a car directly: it is not included in such important expenses as, for example, an apartment or treatment. But you can take advantage of benefits when selling. When parting with a car that has been owned for more than three years, you will not have to pay tax at all. For newer cars, there are schemes that allow you to get a discount on payment or offset compensation when purchasing both a home and a car in the same year. Before selling several cars, make calculations: sometimes it is more profitable to sell them at different times in order to pay less.

Is there a tax deduction when buying a car in 2019?

Our readers are interested in whether, by analogy with housing, a tax deduction has been assigned in 2019 for the official purchase of a car. Let's see what the current legislation says about this, as well as what is expected in the future. In what cases is a car benefit granted and who can use it.

We know that corresponding relief is provided in many areas of life, including education and treatment, acquisition of housing and repairs. Significant expenses can be reduced through a partial refund of funds previously paid to the budget or an initial reduction in the tax base.

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Articles 219-220 provide a list of purposes that are subject to partial compensation.

What expenses are covered in 2018 - 2019?

To find out whether it is possible to provide a refund of expenses for a car within the specified period, you need to refer to the legislative norms.

How it is implemented

Most of the designated areas were created to return a share of costs from previously paid income taxes. Transfers to the budget are made for the applicant, within which compensation may be provided. Therefore, the applicant must be one of the officially employed citizens.

The second option is to reduce the base by a certain amount. It is used when selling a car. All citizens forced to pay personal income tax on profits have the opportunity to reduce expenses. Out of 250,000, the tariff is not withdrawn, which allows the applicant to save 32,000 rubles.

This method is used by the state to stimulate the withdrawal of purchase and sale transactions from the shadows. It also provides for improving the quality of life of citizens by providing assistance in meeting such basic needs of social importance.

By studying Articles 219-220 of the Tax Code, it can be determined that preferential compensation is implemented in the following situations:

1. Acquisition of housing stock.
2. Individual housing construction.
3. Expenses for repairs and reconstruction of the home.
4. Mortgage repayment.
5. Payment of interest on housing loans.
6. Expenses for your own education and your immediate family.
7. Medical expenses.
8. Social sponsorship.
9. Creating a pension in the future.

Comment! A refund is provided upon sale, but when purchasing a car in 2018-2019. it is not provided.

Will there be a compensation limit in 2019 when buying a car on credit?

Readers who are studying the purchase of an apartment on credit are aware of the possibility of obtaining a refund in this case. In addition to partial compensation of the principal amount (limit of 2 million), taxpayers are guaranteed compensation of 13% of interest paid on the mortgage (up to 3 million). Such a deduction is indeed determined when purchasing real estate, but not a car.

A corresponding relief in the form of a refund of part of the funds paid on a car loan, in the form of principal and interest, is not provided for the purchase of movable property. Property return is assigned only in the case of purchasing residential real estate for permanent residence.

Keep receipts and other evidence of targeted expenses if you intend to receive budget reimbursement. Contact legal experts with the required specialization to protect your rights.

We remind you! You can have your situation assessed by a lawyer - it's free! Call!

Is there a tax deduction when buying a car in the period 2018-2019?

A large percentage of the population today seeks to take advantage of property returns. And they are bewildered by the fact that during the acquisition phase of the property in 2018, no tax preference was provided. Sellers of movable objects can obtain a deduction of 250,000. Maximum 32,000. Within these limits, it is possible to reduce the tariff paid on profit.

There is no provision for purchasing a vehicle during the current period. This possibility is not specified in the Tax Code. Moreover, the main tax law does not provide any explanation on this matter. And the presented list is exhaustive, it is designated by articles 219-220.

It can be determined that, regardless of the amount spent and the use of other types of benefits, there are no tax breaks when purchasing vehicles.

The future of tax benefits when buying a car

Projects regarding the provision of certain concessions when purchasing a vehicle have been repeatedly submitted to the State Duma for consideration. They provided for the possibility of reducing costs subject to certain conditions:

• purchasing a new vehicle;
• domestic cars;
• foreign cars produced on the territory of the Russian Federation;
• amount within 500,000 rubles;
• one-time limit.

If the corresponding project is approved in the future, then relief for the purchase of a car may be provided one-time. The limit of 500,000 is determined for each applicant once in a lifetime. This will allow the applicant to reduce costs in the future when purchasing a movable object by 65,000 rubles.

The corresponding project was developed by the “creators” of the law to stimulate the purchase of domestically produced cars. The more profitable the purchase, the wider the circle of buyers will become. Such contributions could bring significant improvements to the automotive industry.

For now, these are just plans without expected consequences. Therefore, the car purchase deduction for 2019 has not been approved. We'll keep track of how things progress in the future.

Attention! Cars with a disposal period of more than 3 years are subject to tax exemption in case of sale.

At this stage, there are no concessions for the purchase of cars even for the preferential category of citizens. Lighter conditions are determined only in case of sale. But there are prerequisites for their implementation at the stage of acquiring movable property. At least specialized projects were submitted for consideration. When this opportunity is realized, then we’ll talk about the features of its purpose.

If you have any questions while studying the material, you can ask them to a legal professional online.

Current questions and answers

Question: Do I need to submit a declaration when selling an old car?
Answer: The age of the car is not a priority in this matter. The period of ownership of this vehicle is taken into account. If you have owned the property for more than 3 years, then you do not need to pay tax on it. There is no need to generate reports.

Question: How is the period of ownership of a car determined, from the date of purchase to the date of sale?
Answer: We take into account data from Rosreestr on owners. The period of operation begins from the moment your information is entered into the database and ends when ownership rights are assigned to the new owner.

Question: If in a year I sold two cars at once.
Can they give me a 250,000 discount for each property? Answer: 250,000 upon sale is determined for each citizen for a year. Regardless of how many cars you have sold, you will not be able to get relief above this limit. But we remember that cars that have been owned for more than 3 years are not subject to income tax at all in case of alienation.

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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.