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Do I need to pay tax on the sale of the car


Hello dear readers of my blog! When selling a car, many people think about the question: is it necessary to pay tax on the sale of a car? And some do not think, and then they receive a paper from the tax office about the need to pay tax on income from the sale of a car.

Having sold my Opel, I wondered: do I need to pay 13% tax on sales income . I began to understand this issue in more detail and it turned out that there are many nuances in this matter. You can completely avoid paying tax, or you can knock off the tax amount for a standard tax deduction. Let me tell you everything in more detail and in an accessible language.

If you sell a car that you have owned for 3 years or more, you don't even need to think about the issue of paying sales tax. You can sell such a car even more expensive than you bought it. Clause 17.1 of Art. 217 of the Tax Code of the Russian Federation states that income from the sale by residents of the Russian Federation of other property that has been owned for 3 or more years is exempt from tax. Vehicles belong to other property.

If on the day of the conclusion of the contract for the sale of the car you owned it for less than 3 years, then there are several options for the development of events, but in any case, you need to start by collecting documents to fill out the 3-NDFL declaration. If you do not fill out the income tax return from the sale of the car, then even if you are not obliged to pay 13% tax, you will have to pay it.

The set of documents for filling out the 3-NDFL declaration is standard:

  • The passport
  • TIN certificate
  • Car purchase agreement
  • Car sales agreement
  • Certificate of income from a permanent place of work in the form of 2-NDFL (if employers pay 13% of the salary, then it is not needed)

The absence of any documents at hand is not a reason to postpone filling out the declaration. You can always return to filling out other information later when the missing documents appear.

There is no need to pay tax on the sale of a car ...

As I already said, if you sell a car that you have owned for 3 years or more, even if you sell it for more than you bought it, you will not have to pay tax on the sale of the car. Therefore, you do not need to fill out any 3-NDFL declaration.

If you sell a car that you have owned for less than 3 years, you can avoid paying tax in 3 cases:

  • Sell ​​for an amount less than you purchased the car (this must be confirmed by contracts)
  • Sell ​​for the same price as bought (contracts are required)
  • Get a standard tax deduction

In all three cases, it is necessary to fill out a declaration - a certificate in the form of 3-NDFL. The first two options are the simplest, you attach copies of the purchase and sale agreement to the declaration, thereby proving that there is no income from the sale (you did not weld on the sale).

The presence of both contracts allows us to prove that there was no income from the sale of the car, which means that there is nothing to pay tax from. Therefore, outbidders and car dealerships that sell used cars put ridiculous amounts in contracts so as not to pay 13% on the sale.

When buying a car, we do not always think that we may need a purchase agreement, we give it to the traffic police when registering a vehicle.

Personally, I hit all the exceptions:

  • Owned for less than 3 years
  • I didn't have a purchase agreement

It was a shame, 12 days was not enough until 3 years of owning a car. The buyer will not wait, they came to my work from far away just for my car. You can’t say: wait two weeks, my three-year tenure didn’t fit. I had to learn the intricacies of filling out a declaration on the sale of a car, so as not to pay tax.

I already began to think about contacting the traffic police to return the car purchase agreement. But since contacting the traffic police is a long time and not always convenient, I began to look for another legal way to avoid paying sales tax.

Tax deduction when selling a car

Once a year, any taxpayer has the right to a standard property tax deduction, as stated in paragraph 2 of Article 220 of the Tax Code of the Russian Federation.

A tax deduction on income from the sale of a car is the only way to avoid tax or reduce the taxable amount for those who have owned a car for less than 3 years and have not kept the purchase agreement. Those. for those who cannot prove the fact that there is no income from the sale. The tax deduction is also suitable for those who sold for more than they bought and owned for less than 3 years. When selling a car, you can count on 250,000 rubles. standard property tax deduction.

How does the standard tax deduction work? The tax deduction is deducted from the amount for which you sold the car, and the remaining difference is subject to income tax, i.e. 13%.

Let's look at an example: we sold a car for 290,000 rubles, previously bought it for 250,000 rubles. Let's calculate the amount of tax, taking into account the tax deduction:

(290,000 - 250,000) * 13% = 40,000 * 13% = 5,200 rubles .

In this example, you will have to pay 5,200 rubles. income tax on the sale of a car. Agree, good savings, otherwise you would have to pay 37,700 rubles. If you sell a car for 250,000 rubles. or cheaper, you can avoid sales tax altogether. But if you have already used the standard tax deduction this year, then you will have to pay the entire amount of tax on the sold car if you cannot prove that you have no income.

Tax return when selling a car

Now I will tell you how I will get away from paying taxes after selling my car.

I sold the car in May 2016, which means that the tax on the sale of a car for less than 3 years will be owned for 2016. And the declaration will need to be submitted for 2016, but the deadline for its submission is from January 1 to April 30, 2017. It makes no sense to start filling out this reporting form earlier. Because with the beginning of the new calendar year, an updated version of the declaration appears on the official website of the tax service.

On the website of the tax, we download the program for filling, or text file for filling by hand. We take all the documents necessary for filling out and proceed to filling out the declaration form.

If you, like me, file a declaration only for tax accounting of income from the sale of a car, then there is no need to fill in information on income from the place of work, it is already in the tax authority, all taxes on salaries have been paid. This is stated in paragraph 4 of Article 229 of the Tax Code of the Russian Federation: "the taxpayer has the right not to indicate income that is not subject to taxation, as well as income for which taxes are fully withheld, if this does not interfere with obtaining a tax deduction."

Here is a real example of a car sales declaration:

Download an example of a car sales declaration (3-NDFL certificate).

I will tell you how to fill out a tax return correctly when selling a car next time.

Where to bring the declaration?

My registration is in the region of the republic, and I live in the capital, then the question naturally arose: where to carry the declaration? I called the tax hotline. There I was told that tax returns can only be filed at the place of registration.

Another option is to send it by registered mail with a description of the attachments and, of course, with a return receipt. And there is also the option of sending a tax return through your personal account on the website of the tax service in electronic form or through the portal of public services, provided that you have an electronic digital signature. Such a thing is not enough for any individuals. This is not for ordinary people.

None of the above methods suited me. At the place of registration, you had to go 90 km from the place of residence, and this is a weekday, take time off from work, and even return back with errors. I do not have an EDS, my personal account on the tax website is not registered.

The girl on the hotline answered somehow not confidently, so I decided to search the Internet and found it. Clause 2 of Article 229 of the Tax Code of the Russian Federation states: "Persons who are not obliged to submit a tax return are entitled to submit such a declaration to the tax authority at their place of residence." I will do so, I will go to the nearest division of the Tax Service, or better to the central one.

What conclusions did I draw:

1) If the car suits you, then drive it until 3 years from the date of purchase

2) If you really want to sell a car, then legal ways to avoid paying tax can help you

- filling out the declaration and proof of the lack of income in the person of purchase and sale contracts

- filling out the declaration and standard property tax deduction up to 250 thousand rubles

3) If you own a car for less than 3 years, you must submit a declaration of income from the sale of the car by April 30 of the year following the year of sale

4) If it was not possible to avoid the appointment of tax on the sale of the car, then 13% of the sale of the car must be paid before July 15 of the year following the year of sale

5) If you submit a declaration in violation of the deadline for filing (late), then you will also be fined. The penalty will be calculated as 5% of the tax amount payable for each full or incomplete month of delay, but not more than 30% of the tax amount and not less than 1,000 rubles. Pay your taxes on time!