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.

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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Is it possible to get tax deductions when buying a car on credit or when selling it?

Is it possible to get a tax deduction when buying a car?

A car has long been transformed from a luxury item into a vital necessity for every family and individual. Therefore, now almost every family has two or more cars. Purchase and maintenance take up a significant portion of the budget.

From time to time, every person becomes a buyer or seller of a car. It is not surprising that every motorist would like to purchase some discounts or benefits when buying and selling a car. Everyone is wondering whether it is possible to get a tax deduction when buying a car with your own money or if it was purchased on credit.

Why is there no tax deduction when buying a car on credit?

Buying a car on credit has become an integral part of our lives. Almost no one can save the required amount on their own. Therefore, citizens often resort to loans, and then pay them off for years.

Due to the availability of information, the majority of the population knows about tax benefits and deductions when purchasing property on credit. Every law-abiding taxpayer has the right to recover part of their expenses when making large purchases.

The state provides a tax deduction for interest payments on the following types of housing loans:

• for the construction or purchase of housing;
• to refinance loans previously received for the purchase or construction of a house (apartment).

This is noted in the Tax Code of the Russian Federation, Article 220, paragraph 4. The car is not on this list, which means there are no discounts when purchasing a car on credit, and it is also impossible to get benefits for repaying interest on the loan.

This is confirmed in the Letter of the Ministry of Finance: the list of property for which the deduction is provided is final and cannot be expanded in the near future.

Therefore, a personal car is not included in the list of property for which a deduction can be obtained. Therefore, regardless of the size of the loan or the timing of its repayment, the car owner will not be able to receive any benefits or discounts.

Even for preferential categories of citizens: pensioners, disabled people and war veterans who suffered at the Chernobyl nuclear power plant, no exceptions have been made. They are also not entitled to tax breaks.

Is there a tax deduction when buying a car?

Is there a deduction when buying a car with your own funds?

Every citizen who works and regularly pays taxes in Russia receives a tax deduction when purchasing any large property. For example, when purchasing an apartment whose cost is 1 million rubles, a refund of 130,000 rubles is possible.

This benefit is not available when purchasing a car. Although buying a car is quite an expensive pleasure, a lot of time and money is spent on registration and waiting in queues.

A tax deduction can be obtained in the following cases:

• purchasing an apartment, private house or share in this property;
• construction of a private house;
• acquisition of land for the purpose of building a house;
• repayment of interest on loans taken for the construction, purchase of housing or land intended for housing construction.

That is, the tax benefit applies only to real estate. The car does not belong to this category. Therefore, no matter how high the price of a car, it is impossible to receive financial assistance from the state when purchasing it.

We can conclude that neither buying a car with your own savings, nor buying on credit, nor leasing provides an opportunity to receive a tax discount.

When purchasing a car, a citizen is not required to pay tax to the state. A tax deduction is provided for the amount of tax paid. Since there is no tax, there is no deduction.

Possible ways to reimburse purchase costs

Since a tax refund is possible only when selling a car, any person purchasing it should already at this stage think about its future sale. Unless, of course, the car is planned to be sold in the future.

In order to subsequently receive a tax deduction, you should:

1. Save the contract indicating the cost of the car. It is advisable to have documents certified by a notary.
2. For the next 3 years, collect checks and receipts confirming expenses for improving the characteristics of the car. If during this period the owner of the car decides to sell it at a lower cost (usually this happens), then it will be possible to get a discount on these documents.
3. Register the car in your name. Without this, there will be no benefits.

If the documents confirming the sale or purchase of the car have not been preserved, then it is difficult to return part of the money spent, but it is quite possible.

Deduction when selling a car

Why is there a tax deduction when selling a car?

Sale is the only car transaction for which a tax deduction is possible. If the seller owns the car for 3 years (36 months) before the date of conclusion of the contract, then he has the right not to pay tax; if less, then the owner pays income tax, taking into account the tax deduction.

In the latter case, the seller is obliged to fill out and submit a 3-NDFL declaration to the tax authorities, indicating the amount received from the transaction. Evasion from filing a declaration is punishable by a fine of 1,000 rubles.

If a car that has been owned for more than 3 years is sold, then there is no need to fill out a declaration, since no taxes are provided.

The following must be attached to the declaration:

1. PTS, in which it should be noted that the car has been deregistered (a copy is possible).
2. A contract indicating the cost of the car. The contract must initially be made in two copies: one for the seller, the other for the buyer.
3. Payment documents: receipts, receipts.

The declaration must be submitted by April 30 of the year following the sale of the car. You need to get a receipt from the tax office to pay the full amount of tax before July 15.

If the owner of a car received more money during the sale than he spent on its purchase, then he is obliged to pay a 13% personal income tax on this difference. It is necessary to have documents confirming this fact.

If the price is less than 250 thousand rubles, the cost of the car is not subject to tax. This rule applies even if the owner sold the car at a profit, but the price of the car is no more than 250,000 rubles.

But the declaration must be submitted in any case if the car has been owned for less than 3 years. It must be accompanied by a copy of the PTS, a purchase and sale agreement proving that the car costs no more than 250 thousand.

Example. The car was sold by a citizen for 320 thousand rubles. The paperwork for purchasing the car was not preserved. A citizen has the right to receive a tax deduction in the amount of 250 thousand, and from 70 thousand rubles - to pay a personal income tax of 13% (320 thousand - 250 thousand).

If there is a document confirming the purchase, for example, for 280 thousand rubles, then the citizen will pay 13% from 40 thousand (320 thousand - 280 thousand).

Under what conditions can you get a deduction?

Conditions for receiving a deduction when selling a car

In order to receive a deduction when selling a car, the following conditions must be met:

• the owner of the car is a taxpayer of the Russian Federation;
• there is a PTS proving its ownership;
• a document confirming the transaction indicating the income has been preserved.

If, after purchasing the car, the owner made some changes to the car that resulted in improved performance, then you can include this in the list of property expenses. To receive a deduction, you will need to document these costs (checks, receipts).

There is no legally established list of such changes. But improvements in consumer qualities include:

• increased comfort: air conditioning, expensive upholstery, electric window lifts;
• improved functionality: racks, fastenings;
• change in appearance: wheel rims, xenon headlights;
• TV in the salon, navigator.

The amount of such costs cannot be higher than the income received from the sale.

You can only receive a tax deduction from the state once in your life. That is, if a citizen has already received a deduction for housing, then subsequently it will no longer be possible to return personal income tax to pay for education.

Normative base

The laws of the Russian Federation determine that every citizen, when purchasing property, can receive 2 types of deductions: property and social.

The Tax Code of the Russian Federation lists a number of types of property for the purchase of which a citizen is entitled to a tax deduction. The car is not on this list. Therefore, no matter how much money a person spends on purchasing a car, there is no point in waiting for a personal income tax discount, because the purchase of a vehicle does not serve as the basis for obtaining the right to apply for a property deduction.

1. Article 220 of the Tax Code of the Russian Federation provides for obtaining the right to a tax deduction when carrying out transactions only with real estate. Transport is not one of these.
2. The issue of tax deduction for vehicles has not been considered at the legislative level.
3. The cost of a car is usually no more than 600,000 rubles. Only a very small part of the population buys cars costing more than 1 million rubles.
4. A tax deduction is only due to a person who regularly pays taxes to the state.

You should not assume that a tax deduction is an integral part of the funds spent on the purchase of any property and that after completing the purchase and signing the contract, you will be able to get these funds back. A tax deduction assumes that if certain requirements are met, not the entire amount of the transaction will be subject to personal income tax, but only some part of it.

Social tax benefits are discussed in paragraph 1 of Article 219 of the Tax Code of the Russian Federation. These include funds paid for charity, treatment, training, insurance of future pensions of citizens of the Russian Federation.

It is clear that buying and selling a car cannot be classified in this category. Therefore, car owners cannot claim social tax benefits when selling or buying a vehicle.

What conclusions can be drawn

Tax deductions for car transactions

Having studied the Tax Code of the Russian Federation and some other laws, we can draw the following conclusions:

1. Buying a car does not give you the right to receive tax deductions.
2. When purchasing vehicles on credit, no benefits are provided either.
3. Tax benefits are only available when selling a car.

No taxes are paid when selling a vehicle if:

• the car has been owned for more than 3 years;
• the owner sells the car for less than he bought it for;
• The cost of the car is less than 120 thousand rubles.

The owner is obliged to pay income tax to the state if:

• the car was owned for less than 3 years;
• documents on the original cost of the car have not been preserved;
• the amount of the completed transaction is more than 120 thousand.

One point to remember is that citizens must claim the tax deduction themselves. Because the tax office does not offer a deduction and does not pay if people do not apply for it themselves. That is, the tax office itself is not obliged to offer tax benefits; this happens only at the request of an individual.

Another important point: you can receive a deduction at any time; there are no time restrictions.

The lack of tax benefits when purchasing a car is an unpleasant moment for many motorists. In times of crisis, with the high cost of gasoline, even a small amount of deduction could be a tangible help for the family budget.

In addition, many people are often stopped from buying a car by the lack of even a small amount. But apparently our legislators do not consider a car to be a necessary attribute of life, and tax benefits were allocated to what they consider to be vitally important housing, treatment, pension insurance, and education. Although a car is often comparable in cost to an apartment or small house.

You will find out whether there is a tax deduction when buying a car from the following material:

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Is it possible to get a tax deduction for buying a car?

Currently, there is a law that provides for a refund of personal income tax if a citizen makes very expensive purchases during the calendar year. In this case, purchases must be classified as necessary.

A car is a very expensive thing, and many people wonder whether it is possible to get a tax deduction for its purchase in order to reduce their expenses legally. At the moment, there are several ways you can save on paying taxes when selling or receiving a vehicle with your own or credit money. They can be used under certain conditions.

Legal basis for property tax deductions for large purchases

Article 220 of the Tax Code of the Russian Federation establishes the possibility for certain categories of citizens to return part of the tax amount when conducting purchase and sale transactions or construction of real estate in Russia. It also describes the procedure and possible options for reimbursement of money, categories of citizens and specific cases of transactions with property during which they may qualify for such assistance.

What is a tax deduction

This economic term means a personal income tax refund - 13% income tax. If a person manipulates expensive real estate or services within one year, he has the right to return the previously paid amount of income tax. This benefit is valid only in cases where citizens have made expensive purchases that are vital.

Who can claim 13 percent when making a purchase?

Citizens who have made large expenditures on basic necessities over the course of one year and, as a result, have significantly reduced their budget, can count on such assistance from the state.

The benefit applies to the purchase or construction of real estate in Russia, education, expenses for expensive treatment, diagnosis or prevention of diseases, and charity. These categories of expenses are considered especially important for life, so the state is ready to return income taxes for their purchase.

Is it possible to get a 13% tax deduction for buying a car?

Many people have found it helpful to be able to have part of their property purchase costs reimbursed. Cars, like real estate or medical treatment, are very expensive purchases, so a reasonable question arose among the population about whether a 13% return on the purchase of a vehicle is possible.

Exists or not and why they talk about it

The Tax Code does not talk about reimbursement of costs for the purchase of vehicles. But recently information has appeared that the authorities are still planning to expand the powers of Article 220 of the Tax Code, but so far this process is at the stage of discussions and assumptions of experts. Recognizing the cost of a car as a priority will be very useful for Russian citizens.

Tax refund when buying a car on credit

The law does not provide for a deduction when purchasing a vehicle not with personal money, but with borrowed money. In this case, the procedure is no different from the standard one, although the buyer additionally enters into an agreement with the bank from which he received the loan. If the buyer, for any reason, sold his car earlier than 3 years after purchase, he must pay personal income tax.

When calculating, a citizen can take into account the money that had to be spent on paying off loan interest.

Will there be changes in 2019 and their description?

At the moment, it is difficult to assess the possibility of making a decision that the purchase of a car will be considered an expense for which a refund of tax contributions can be obtained, but some deputies have taken up the preparation of a bill. It is expected that if the car tax refund law is adopted, the following restrictions will apply:

• the purchased car must be new;
• returns will be possible only when purchasing domestic cars;
• the benefit will be a maximum of 500 thousand rubles.

Perhaps the law will include a list of brands and models that can be purchased to take advantage of this benefit. It is also likely that the tax deduction for purchasing a vehicle will be relevant only for those people who are buying a car for the first time.

How can you save money when selling/buying a car?

The sale of any property implies making a profit. Thus, when selling his car, a citizen is obliged to pay the so-called personal income tax, that is, give the state 13% of the transaction amount. However, this rule only applies to those sellers who want to resell a car that has been in their possession for less than 3 years.

Transactions in which the sale amount exceeds the purchase price of the same car, or the seller’s income is more than 250 thousand rubles, are also subject to tax. Of course, few people want to give away a significant portion of their profits, so there are some ways to evade taxes.

Selling minus buying

Anyone who has encountered the purchase of valuable property knows about the serious costs associated with this process. If the car seller has retained checks, receipts and other documents confirming the fact of additional costs for the purchase of the car (which he sold for more than he purchased), he can receive a discount. The formula looks like this: the purchase amount is subtracted from the sale amount and then multiplied by 0.13. Thanks to this, you can save an impressive amount.

Netting method

This method is not suitable for everyone, because it involves considerable costs. To save in this way, you need to sell a car and buy real estate in the same year. The scheme is quite simple: if a citizen sells a car, he must pay 13% of the proceeds, but if he immediately buys a home, he has the right to a personal income tax refund.

However, this applies to those sellers who have not previously used this opportunity.

Standard deduction

This method applies to cases where a car is sold for less than 250 thousand rubles. This often happens when selling heavily damaged cars. To avoid paying personal income tax in this case, you need to submit documents indicating that the citizen did not receive a significant profit from the sale of his property. Such documents are checks, notarized receipts, receipts. However, this can only be used once a year.

How to prepare documents correctly

To receive a discount or not pay tax at all on profits from the sale of a car, you need to prepare the following package of documents and submit it to the tax office:

• passport and TIN of a Russian citizen;
• tax return with code 3-NDFL;
• technical passport of the car;
• contract for the sale of a car, which specifies the details of the transaction;
• receipts, checks.

Title page of declaration 3 -NDFL

An application is attached to the package of documents, which must be submitted simultaneously with the provision of 3-NDFL. Submission of documents must occur no later than April 30. If a citizen is late in providing papers, he will face penalties.

How to get an income tax refund when buying a car

Most Russian citizens are familiar with the rules of tax compensation when purchasing real estate. It is provided because residential premises in the form of an apartment or a plot of land with buildings are classified as expensive acquisitions. Based on this, it is important to understand whether a similar procedure is acceptable for vehicles.

Tax compensation when buying a car includes a number of important subtleties that must be taken into account when starting the compensation procedure.

About tax deduction

The regulations stipulate that citizens who made large purchases within one year and at the same time paid personal income tax have the right to return the transferred contribution. Income tax refunds are provided for expenses that are most significant to the lives of citizens. In particular these include:

• Acquisition or construction of residential premises;
• Studying at a university;
• Undergoing treatment in a medical facility;
• Charity.

Considering that there is no vehicle on this list, no compensation is made when purchasing a car. Along with this, there are several options that can really save money.

Who can make a payment

Let's determine which categories of persons have the right to receive a tax privilege from an expensive purchase, for example, an apartment:

1. Citizens of the Russian Federation paying income tax.
2. Pensioners who have a legal source of income other than a pension.
3. Foreigners who have become residents of Russia and have a stable income.

When registering a transaction for a minor, the registration of a property tax deduction is entrusted to his official representatives - parents or guardians. However, it is important that they fall into one of the above categories.

According to Russian legislation, tax compensation when buying a car is not provided; even the car is registered in the name of a child, which is acceptable.

The advantage of this action is that a citizen under sixteen is not subject to administrative fines. But parents should remember that they will not be able to control the fate of the car if it is registered in the name of a child. This rule applies to all types of property owned by a minor.

Persons conducting business activities cannot receive a standard tax deduction, since it is compensated by personal income tax, which businessmen do not pay for themselves. Along with this, entrepreneurs have their own tax preferences if a car is purchased by a company and not by an individual.

Basic options for saving

It is unacceptable to receive a tax refund at the time of purchasing a car, but it can be done upon sale. Only this is not a refund, but a legal non-payment. According to the rules, the seller who makes a profit is obliged to transfer 13% to the state. Please note that this rule applies to persons who have owned the vehicle for less than 36 months. If the car was owned longer, the owner is exempt from contributing to the federal budget.

When calculating the three-year period, it is important to know the start date of ownership, it depends on the method of obtaining the car. For example, when buying and selling or donating, the day is specified in the contract, and when inheriting, the starting point will not be the entry into rights, but the day of death of the testator.

Individuals report to the state for income by submitting a declaration before April 30 of the year following the accounting year. This year, the document can be submitted in person, sent by mail or using your personal account on the website.

Selling without profit

This option is quite common, since when a car is sold second-hand, the cost of the car will be lower than what the car was purchased for before. In fact, the person does not make a profit, so no tax is paid on this.

The main thing is to save the documentation and receipts from the purchase of the car. We point out that if the vehicle was owned for less than 3 years , then a zero form should be submitted. So, the basic condition is that the purchase amount in the past must be higher than the current value specified in the agreement.

Regular deduction

At the legislative level, a standard benefit is provided for the purchase of a car if the price of the car is no more than 250,000 rubles . This option is ideal when it comes to a deed of gift or entry into the rights of an heir. The new owner will not have to pay income tax equal to 13%; the transaction amount is less than the deduction.

According to inheritance law, the receipt of expensive property is not taxed if it is transferred to first-degree relatives. The rest will have to pay a fee to the state budget, even if there is a will.

Netting method

Mutual settlement is applied when two transactions of equal amount were made within one year. One of them is associated with acquisition, the other with sale. For example, a person purchased a property from which he has the right to receive a refund of the tax paid. At the same time, the citizen sold the car at a similar price.

Please note that purchasing a car instead of another, even if the amount is equal, will not be grounds for a deduction. As noted above, a vehicle does not fall under the category of vital items.

The deduction for the purchase of real estate will be calculated according to the standard formula. When the car was sold for 3 million, then the price of the apartment cannot be less in order to offset it.

Procedure for filing a deduction

To implement a tax refund using one of these methods, you must first of all take a responsible approach to the formation of a package of papers. Tax authorities ask to present at least three basic documents related to the purchase of a car:

1. Car passport, where the new owner of the vehicle is noted.
2. A document reflecting the transfer of ownership and disposal rights - a purchase and sale agreement or a deed of gift.
3. An extract from the bank account to which the funds were received.

If it is permissible to issue a deduction, then an application drawn up in a unified form is attached to the declaration. It reflects the grounds for preferential taxation. For example, it is indicated that the transaction amount was less than 250,000 rubles , which corresponds to the standard deduction for cars.

You should not delay filing your return; if the document is submitted to the tax service after April 30, penalties and interest will be imposed. If errors are found in the document, the department will give the opportunity to correct them, but only if it is submitted on time.

Deduction from a car purchased on credit

Considering that at the moment there is no compensation for the purchase of a car, even if it was purchased on credit, it will not be possible to receive a preference. Noting whether it is possible to get back part of the finances when purchasing on credit, we will indicate that this is feasible. But the procedure will only apply to purchases of property and services from the narrow category of essential ones.

Income tax refund is a procedure that assumes that a citizen has made contributions to the federal budget within the year. At the same time, he made an expensive purchase from his own funds. As an incentive, the state compensates for a person’s obligatory contribution by returning the money in a one-time payment.

This year, a bill is being considered that would provide a tax refund when purchasing a car, but at the moment it has not been adopted. Such a procedure will be beneficial for all parties, since people will no longer underestimate the real price of the car when forming a sales contract.

Only the seller can save money through a vehicle deal, and they have a range of options when it comes to saving money. Both employed citizens of the Russian Federation and foreigners have the right to receive a tax deduction. As for pensioners, they will be able to return the money provided they have a legal source of income in addition to the pension.