What is personal income tax and at what rates is it calculated

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

In most cases, the employer transfers the money to the state, but sometimes you have to do it yourself.

What is personal income tax and who pays it

Everything is clear from the name: it is paid by individuals who receive money from various sources and must share it with the state. This tax is also called income tax, or personal income tax. Payers, in turn, are divided into two groups.

Tax residents. These include people who live in Russia for most of the year and earn income here and abroad.

Tax non-residents. They receive income from sources in Russia, but spend less than 183 of the Tax Code of the Russian Federation in the country, Article 207 days in 12 months (we are talking about the following months in a row, and not about a calendar year). There are exceptions. Residents still remain those who have gone abroad:

• to be treated or study for up to six months;
• for work on offshore hydrocarbon deposits;
• for military service;
• on a business trip, if we are talking about government officials.

Citizenship does not matter in the matter of residence.

What income is subject to personal income tax

The tax is paid on income received in cash and in kind. It can be:

• any payment for labor - salary, fees, and so on;
• income from the sale of securities and property;
• income from renting out property;
• lottery winnings, prizes and gifts from individual entrepreneurs and organizations over 4 thousand rubles;
• real estate, a car or securities received as a gift not from close relatives;
• income from deposits, if it exceeds the threshold value (product of 1 million by the key rate in effect on January 1 of the year for which the tax is paid).

Some income is exempt from personal income tax. First of all, these are various social benefits, subsidies and benefits that should improve the financial situation of the recipient, as well as pensions, scholarships, repaid debt, property and shares received as a gift from close relatives or by inheritance. In addition, you do not need to pay tax on income from the sale of an apartment and a car that you have owned for more than three years. There is an additional condition for housing: it must be the only one. If you have several apartments, you can sell any of them tax-free after five years of ownership.

What rates apply to income tax

For tax residents

The default rate is 13% of the RF Tax Code Article 224. But if the income exceeds 5 million rubles, then everything on top is also taxed at 15% Federal Law of 23.11.2020 No. 372-FZ. But there is an exception: if you sold the property or received it as a gift and this is not about securities, the rate will be 13%, regardless of the amount. Likewise for insurance and pension benefits.

The state wants to receive 35% of some types of income. These include:

• Prizes and winnings in contests and games that are held for advertising purposes.
• Payment for the use of money of shareholders of credit consumer cooperatives and interest on loans to agricultural credit consumer cooperatives. Tax is levied only on the difference between income under the agreement and according to the "refinancing rate + 5%" indicator.
• Savings on interest when receiving a loan, if it is material assistance and (or) the loan is issued by an employer or other related organization. And again, not the entire amount is taxed, and the difference between the interest under the contract and the actual amount of interest is 9% for a loan in foreign currency or ⅔ of the refinancing rate.

For non-residents

The default tax rate is 30%. But, again, there are exceptions:

• A 15% tax is paid on dividends from equity participation in a Russian organization.
• 13% of the income is given by foreigners working under a patent, highly qualified specialists who came to work under a contract, those who moved to Russia under the compatriot resettlement program, crew members of Russian ships, refugees and persons who received temporary asylum, as well as residents of the countries of the Eurasian Economic union - Armenia, Belarus, Kazakhstan and Kyrgyzstan.
• Dividends on shares and shares of international holding companies that are public are taxed at 5%.

What tax breaks are there for personal income tax

These are all kinds of deductions. For example, if you sold an apartment or car that you owned for less than three years, you must pay 13% of the money received. However, you can reduce your taxable income by a statutory amount. For housing it is 1 Article 220. Property tax deductions million, for a car - 250 thousand. So, if you bought an apartment for 2 million, you can take advantage of the deduction and pay tax on only 1 million.

For housing, there is one more indulgence: if you sold an apartment for 2 million, and bought it for 1.5 million, then the income is equal to the difference between these figures. The tax is paid only from 500 thousand. If you sold it cheaper than you bought it, you won't have to pay tax at all. It is only important that you have documents that confirm the expenses - a check from the developer or a receipt from the seller.

In addition, there are deductions related to your life circumstances, which allow you to return personal income tax in part or in whole. These are what they are:

• Property - when buying a home, building a house, paying off interest on a mortgage loan, buying out your property for municipal and state needs.
• Standard - for parents and adoptive parents, disabled people, Heroes of Russia, liquidators of the Chernobyl accident.
• Social - for education, treatment, charity, insurance, including non-state pension.
• Investment - if you have credited money to an individual investment account.
• When carrying forward losses from operations with securities, derivative financial instruments, from participation in an investment partnership.

For more details, read Lifehacker's long article on tax deductions.

How to pay personal income tax

The employer pays tax on official salaries and honoraria. In this case, the person himself does not need to do anything. From the rest of the income, you must transfer personal income tax yourself.

If the employer pays income tax

For most Russians, there is no need to pay tax on their own. As mentioned above, the employer pays personal income tax from official income. He deducts 13% from the accrued amount of earnings, gives the remainder to the employee, and transfers the NFDL to the tax office. You need to transfer money once a month on payday or the next day.

It is important that the reporting period for personal income tax is not a month, but a year. Therefore, the tax base is calculated on an accrual basis: the data of the current month is added to the result of the previous month. This is done for the accuracy of the calculations. Income tax is paid in full rubles, without kopecks. Due to such rounding at the end of the year, an extra ruble may be lost or crawled out. This is a trifle for life, but for a report it is a critical value.

In addition, the employer reports on the personal income tax paid for the employee. There are two documents for this:

• 2 ‑ personal income tax - income statement;
• 6 ‑ NDFL - calculation of the amounts of personal income tax calculated and withheld by the tax agent (that is, the employer).

2 ‑ personal income tax is filed with the Federal Tax Service once a year until March 1. 6 ‑ personal income tax - for the first quarter before April 30, six months before July 31, for three quarters before October 31 and for the year before March 1.

If an individual pays income tax on his own

This is done once a year. First, the income must be reported. For this, a 3 ‑ NDFL declaration is submitted to the tax office. You need to send it before April 30 of the year following the one in which you received the money. If this date falls on a weekend, then day X is shifted to the next business day.

Lifehacker has detailed instructions on how to submit a declaration, including online - without SMS, but with registration.

The accrued tax must be paid by July 15th. How much - you will understand after filling out the declaration. If you do it online (and this is the easiest way, so it makes no sense to do it differently), the figure will be generated automatically.

If you receive a salary and declare some other income, you have to pay tax only on the latter. The employer has already transferred it from the salary.

What happens if you do not pay income tax

Since the tax payer is an individual, the responsibility for non-payment falls mainly on him. An employer may be fined by the Tax Code of the Russian Federation, Article 123, for performing the duties of a tax agent in bad faith. In some cases, the additional tax of the Tax Code of the Russian Federation, Article 226, will be taken from him - if he previously withheld it not in full.

But in most cases, it is the individual who will still be forced to pay the tax. Additional sanctions are also possible.

Penalties

For tax evasion, they can be fined 20% of the Tax Code of the Russian Federation Article 122 of the unreported amount. And if you can prove that you did it on purpose, the sanctions will be 40%.

For failure to submit a tax return, you will be charged 5% of the Tax Code of the Russian Federation Article 119 of the unpaid tax amount for each month of delay, but not less than 1,000 rubles and not more than 30% of the amount owed.

Penalty

For each day of delay in tax payments, you will have to pay a penalty - 1/300 of the refinancing rate of the Central Bank. Now it is 0.02%.

Criminal liability

A person who owes more than 900 thousand in three years may await the Criminal Code of the Russian Federation Article 198 a fine of 100-300 thousand rubles (sometimes - income for a period from 18 months to three years), or up to a year of forced labor, or up to six months of arrest, or up to a year in prison.