Russian residents who are officially employed and pay personal income tax can take advantage of a tax deduction and get back part of their expenses. In this article, we explain what it is and whether it is possible to get a tax deduction when buying a car.
What is a tax deduction?
A tax deduction is so called because it allows you to deduct from your expenses the amount you paid as personal income tax. This means that under certain circumstances you can get back the personal income tax you paid. Such circumstances are divided into four groups, and, accordingly, four categories of tax deductions are distinguished.
Property . They are available when buying a home or a plot of land, when selling certain types of property, including a car. This category also includes situations in which the taxpayer's property is seized for municipal or state needs.
Social . You can use them if you pay for medical treatment, education, life insurance, sports services and some others. This category also includes donations made by the taxpayer.
Investment . You can get back part of the tax paid gansu mobile number database on investment income.
Standard . Applies to privileged categories of citizens, as well as to persons who have children to support.
How to get a tax deduction for buying a car
By law, there is no deduction for the purchase of a car. But you can still use this right if you decide to sell the car soon. So it is worth thinking about plans for a possible tax deduction already when buying a car.
If you sell a vehicle that you have used for less than three years, you must pay income tax in the amount of 13% of the income received. The property deduction will reduce the taxable base and reduce costs. Therefore, when buying a car, you need to follow two rules:
Avoid gift agreements. Since income tax is paid on the income amount, the seller's expenses are taken into account when calculating the taxable base. If the car was received as a gift, the expenses will be 0 ₽ and you will have to pay tax on the entire amount earned. That is, in a situation where a father gives a car to his son, it is more profitable to register the purchase directly in the son's name.