How not to pay transport tax
Transport tax in the Tax Code of Russia is devoted to Chapter 28. There are all those who have to pay tax, as well as cases when it is possible to be exempt from taxation. Let’s find out more about how not to pay transport tax on legal grounds. If you have any doubts about paying any taxes, then in order to avoid overpayment and trouble, we recommend getting advice from a specialist.
Who must pay vehicle tax
Owners of vehicles must pay vehicle tax. They can be both individuals and legal entities. The tax is levied on any:
- Self-propelled land vehicles (cars, motorcycles, snowmobiles, motor sleds, tractors, etc.), whether wheeled or tracked.
- Water vehicles, including non-propelled (towed).
- Air vehicles.
Vehicle tax is paid by the owner of the vehicle, not by the person who uses it. If you sold your car by proxy after August 5, 2000, you will still be claimed for vehicle tax.
How to get rid of or reduce your vehicle tax
Transportation tax is a regional tax. Tax rates are set by regional laws. The tax is paid to the regional budget and is used mainly for the maintenance and development of transportation infrastructure. Transport tax must be paid by all vehicle owners. However, some categories of vehicle owners, due to the public importance of their work or personal merit, may be exempt from paying transport tax at the federal or regional level.
Who does not pay transport tax according to federal law
The list of transport owners exempted from transport tax by federal legislation is contained in Article 358 of the Tax Code of the Russian Federation. This list includes mainly owners of vehicles performing important functions for Russia. The list includes:
- boats without a motor, as well as with a motor up to 5 hp;
- Passenger cars purchased through social security agencies, both those equipped for the disabled and those with a motor of up to 100 hp;
- river and sea vessels designed for fishing;
- Air, river and sea vessels intended for cargo and passenger transportation, if such transportation is the main activity of their owner;
- combines, tractors, specialized vehicles (milk trucks, cattle trucks, etc.), if they are used for agricultural production and are owned by agricultural producers;
- vehicles used by military organizations (army, FSB, etc., all organizations for which the law provides for military service);
- stolen vehicles, subject to confirmation of the fact of theft by appropriate documents;
- medical and sanitary aircraft;
- vessels registered in the international register of ships of Russia;
- Drilling vessels and installations, fixed and mobile drilling platforms.
Please note: Owning a vehicle with up to 100 hp or equipped for disabled people does not, in itself, give you the right for exemption from transport tax. Such a right is granted only to those who received this vehicle through the bodies of social protection.
Who else may not pay transport tax or pay it incompletely
Transport tax is set at the regional level. The above list obliges regional authorities to exempt owners of the above vehicles from paying tax on it. Article 356 of the Tax Code states the right of regional authorities not only to establish transport tax rates, but also to determine the benefits for certain categories of taxpayers. The right to provide benefits varies from region to region. Most often, transport tax exemptions are granted to:
- persons awarded with the highest awards of the USSR and Russia;
- Chernobyl victims;
- large families;
The regional authorities have the right, but not the obligation, to establish benefits, the benefits may vary greatly by region. Somewhere, for example, pensioners may be entitled not to pay transport tax in full, somewhere they are entitled to a discount, and somewhere they pay the same on a general basis.
You can see benefits and tax rates for your region on the website of the Federal Tax Service.
Pay attention! Tax rates in different regions are different. Re-registering a vehicle in a different region is a legal way to pay less transport tax.
Another way to avoid vehicle tax
Transport tax is paid for registered vehicles. By no means do we encourage you to drive an unregistered vehicle. But many people have old cars that are not removed from the registration, rotting in their yards and garages.
If you can find strength and time, they can be deregistered and you can stop paying transport tax. In addition, nowadays, vehicles can be sold under a simple written agreement. As long as the new owner has not re-registered the vehicle, the car is listed on the old owner and requires payment of tax.
If you sold the vehicle under an agreement, make sure it is deregistered and not registered with you in 10 days. If the new owner hasn’t registered it, deregister the vehicle yourself.
What happens if you don’t pay vehicle tax without a legal basis
Above are all the cases that allow you not to pay transport tax or reduce its amount legally. If you evade paying tax, penalties will be assessed on it, and eventually they will sue the owner of the vehicle and forcibly collect the debt.
Normally, the penalty for not paying taxes is a fine. However, if the failure to pay has reached a large size, then individuals are held liable under Art. 198 of the Criminal Code of Russia (RF Criminal Code), and legal entities – under Art. 199. The minimum penalty under both articles is the same – a fine of 100 thousand rubles. Individuals at most can get 3 years in prison, and owners and officials of enterprises and organizations – 6 years.
Entrust the task to professionals. Lawyers will perform the order at the cost you specify. You will not have to study the laws, read the articles and understand the issue yourself.
Ways to Reduce Vehicle Tax
Friends, I want to share with you the results of my modest research on ways to legally significantly reduce the vehicle tax. If you really want to make your tax kopeck, read to the end, I’m sure you will be interested if you do not know about it.
Having a Mercedes E500 of modest 2005 year with 306 hp, I did not want to pay tax more than 45 thousand rubles, as my money is not superfluous. I solved my question and now officially pay tax for less than 5 thousand rubles a year, but about that a little later.
After studying the Internet, I identified several basic options:
1. Driving a car without registering it with a transit license plate. Probably everyone is more or less aware of this option and probably used it, but nowadays transit numbers are canceled, and the drive on the old transits is the same as driving on fake plates – you can get in for deprivation of rights from 6 months to 1 year. It is not a pleasant prospect. That is why there are no cars with transit numbers for a long time already.
2. The second variant is to register the car in the name of the person exempted from transport tax. But unfortunately there are few such categories and in different regions they have different benefits. For example, in Moscow, veterans of the Great Patriotic War, veterans of combat operations, disabled people of groups I and II have such benefits. That would be all right, but since 2013, these benefits apply only to cars with up to 200 hp. In other regions there may be other categories, but the essence is approximately the same – there are no benefits for citizens for powerful cars over 250 hp, where the most serious tax is due to high rates. And before, not everyone decided to register their car in the name of a disabled person or veteran, even a good friend. Even if we assume that this person is perfectly honest and decent, then no one is immortal on earth, and unfortunately, no one is immortal for veterans and the disabled. And if the man will not be, the owners of the car will be his heirs, who may not be your friends and be aware of your arrangements.
Well, and the third option, which, by the way, and which I used, is the registration of the car in a region with low rates of transport tax. It is no secret that the tax rate varies greatly depending on the region. For example, in Moscow and many other regions the tax rate for a car with more than 250 hp is 150 rubles per 1 hp. In some regions it is somewhat less, but virtually everywhere it is more than 100 rubles per 1 hp, except in the republics of the North Caucasus. As I wrote above, for my far from most expensive, but very fast and comfortable Mercedes E500 with 306 hp the tax will be 45,900 rubles. For that money I could fill up almost six months, taking into account my 20,000 year mileage. But a resident of the benign Chechen Republic, owning a car like mine pays 4,590 rubles, or 10 times less. This begs the question – we should move to Chechnya! But I don’t really feel like it. But getting registered in Chechnya and registering a car there is another matter altogether. All the more so because once you have a residence registration in Chechnya, you can register your car in any region of Russia – in your own, for example, and drive it with the local license plates. Although to be honest, I’d be willing to drive with Chechen license plates at this rate of tax. After all, it’s a problem to get registered in one’s own region, then go to Chechnya and get registered there. Especially since it wasn’t so long ago that it wasn’t peaceful there, and you could have been kidnapped for ransom. I hope that it’s not like that now, but I wouldn’t want to go there unless it was absolutely necessary. Well, this issue has found its solution. With the adoption of the new regulations, the car may be registered at the place of its temporary registration. If it is a temporary residence permit, there are no problems at all, and if it is a permanent residence permit, you need to make a little extra effort, and everything will be fine.
That’s what I did. I found a friend of my acquaintances in the peaceful city of Grozny, who had an apartment there and got me a temporary registration in Grozny for three years. I didn’t even go there – that’s the way it is now. With this temporary registration I went to the Registration and Enforcement Office in my city of Rostov, where they offered me to register my car for 3 years with the registration place in Grozny, Chechen Republic. In principle, this would have been enough for me, I do not plan to drive the car more than 3 years, but I found another legal way to register the car in this situation indefinitely. I won’t describe it here, but know that there is one.
A few friends of mine also wanted to register their cars using this scheme, and a man in Chechnya did not refuse to help them with the registration for a modest fee.
I am sure that many people have such questions and that it is very problematic to solve them. I became convinced of this by digging around on the Internet in search of answers to the question of how to reduce vehicle taxes and how to obtain a temporary registration in Chechnya or another “preferential” region.