Investment tax deduction has appeared relatively recently. In the laws of our country, it was introduced in its current form only from the beginning of 2015. Describes investment tax deductions Article 219.1 of the Tax Code. It is in it that one can read what constitutes a new kind of preferences, to whom it is available and what is the algorithm for obtaining benefits. The mechanism is completely legal, legal, created specifically for those who are passionate about investing and take this matter very seriously.
general information
Investing today provides a productive and economically successful tomorrow. At the state level, this means that the authorities must use all possible methods to intensify the investment of money in enterprises. The most effective way to achieve activation is to introduce such mechanisms of deductions, preferences, surcharges that will make investing a reliable, profitable process. Now many citizens have quite large amounts in banks. In order to convince them to invest in enterprises instead of banks, it was decided to introduce investment tax deductions as an example.
Formal documentation of the new feature in the Tax Code made the operation legal. This means that the benefits are transparent, calculating them is quite simple, they are available to everyone. The amount of the investment tax deduction will depend on the money invested as an investment in a project.
What to count on?
Who is entitled to standard social investment and property tax deductions? Citizens of our country are counting on those if they fit one of the criteria clearly specified in the Tax Code.
Suppose a citizen who pays taxes on time is working on the stock exchange. In a given time period he sold bonds, shares for a certain amount. The citizen received a positive result, which means that he is entitled to standard social investment and property tax deductions. This is true only for such a situation when a citizen has owned securities for 3 years.
Important Features
The described rules apply only when securities that were officially listed on the stock exchange in our country were involved in transactions. The organizer must also be Russian.
You can count on an investment tax deduction if the subject of the transaction were units of mutual funds managed through Russian firms.
What else is there a deduction for?
The state provides some preferences to a citizen who in the tax period contributed some finances to an individual investment account. You can benefit if the account has been properly recorded.
Theoretical base
IIS is organized as part of internal accounting. This is created so that with respect to a given client all operations are taken into account separately. The account reflects liabilities, monetary opportunities of the client, securities in his possession.
The legal status of IIS is established in the federal law of 1996 under number 39, and specifically, in the third part of the tenth article.
Deduction: wisely
Under the updated legislation, an investment tax deduction for one of two varieties is available to citizens of our country.
The first option is to annually receive an investment tax deduction of 3 personal income tax. The amount of preferences is determined by how much money has come to this account during the reporting period. This possibility is described in the Tax Code in article 219, the first paragraph, the second subparagraph.
The second option assumes that the investment tax deduction is received immediately for the entire time period that the investment cooperation agreement is in effect.
How much and how
How to get an investment tax deduction and how much can I expect? According to the law, it is impossible to receive an amount exceeding 400 thousand in one year. To take the state money from the state, you will first have to fight with the bureaucracy.
An investment tax deduction for personal income tax is issued. The declaration should be filled out on the basis of official documentation confirming that enrollments were actually made on the IIS.
How it works?
Only then can a deduction be obtained if, while the investment agreement is in force, the citizen paying taxes and awaiting preferences did not have another IIS. An exception would be the situation when a person closed one IIS and transferred all his funds immediately to another investment account. It is very important that the account holder in both cases be the same individual. At the slightest discrepancy, you should not rely on preferences from the tax authorities.
A situation is possible when an individual has already written an application for an investment tax deduction and the procedure for granting preferences has been started, and here the contract for IIS is terminated. In this situation, the taxpayer will have to pay all taxes in full, and then also pay a penalty to the budget. Representatives of the tax structure in each individual case will consider these amounts individually, taking into account all the features of the current situation.
Investment deduction: the logic of the provision
How does this happen? Suppose, over the past year, a certain citizen who has an individual investment account put 500 thousand on it. At the main workplace, the total income for this year from this citizen would be one million. From this amount, tax should be paid, which the employer withheld, - 130 thousand.
By submitting documents for the investment tax deduction, you will have to draw up 3 personal income tax, first get 2 personal income tax at the enterprise. This document indicates what was the income for the year and how much was withheld to make tax and social contributions. These indicators are transferred to 3 personal income tax, here they write how much money was deposited into the investment account. Such a document will serve as the basis for a return of 13%. Since in the example a citizen contributed 500 thousand to the IIS, and according to the law for tax deductions the maximum base value is 400 thousand, 13% will not be calculated from the amount that was transferred as an investment, but 400 thousand. This means that you can expect a return of 52 thousand.
We formalize everything
The tax service will not talk with a citizen applying for deductions, but not having the opportunity to document that the money was indeed deposited into the investment account.
To justify your position, you will have to attach documents from which it follows that the IIS really is and is open in the name of the applicant, as well as papers confirming the transfers made.
Money and rules
When an investor submits documents for the preferences set by him from the state, as he meets the requirements, he receives income. There will be no taxes on these amounts in the future. This means that there is no personal income tax for deductions.
The broker can provide a deduction when the contract concluded with the investor ends. Three years must pass from the moment of conclusion of the contract to the time of payment. An individual additionally needs a certificate stating that they did not receive other investment deductions. This can be obtained by writing a statement to the IFTS.By providing this certificate to the broker, the citizen receives the following advantage: the broker will not withdraw personal income tax when paying the investor. In general, the logic here is exactly the same as in the calculations of the employer with the employee with the rights to property deduction.
References and deductions
Another way to get an investment deduction is to contact your IFTS branch by filling out 3 personal income tax. The state authority, the tax agent may provide a tax deduction, taking into account, calculating, withholding personal income tax. Again, all this is possible only with the help of the IFTS.
The tax certificate must contain exhaustive information about the applicant’s use (or non-use) of the certificate of investment deduction, as well as reflect data on all investment agreements concluded by an individual in the requested period of time. You can rely on preferences under one contract and within the framework of funds contributed to the IMS.
Some features
Quite often, the following error occurs: an investor starts an IIA, then first withdraws money from it and only after that applies for a tax deduction. The tax service refuses the petitioner, which causes bewilderment, misunderstanding and dissatisfaction with the work of laws. But it directly follows from the current Tax Code that a tax deduction is not due when an investor withdraws money from his account.
The investment account reflects some property. It is unacceptable to apply it, providing obligations of any other contract. In the opposite case, you should also not count on a deduction.
We count - do not recount
Often, investors try to summarize the results obtained on all their accounts with a broker, including investment. Of course, there is hope to receive preferences from the state for the entire amount obtained.
According to the rules and laws for the tax service, the indicators of the monetary total withdrawn from the IIA are important. Therefore, it will have to be settled separately, not taking into account the effectiveness of other investor accounts with a broker.
Tax agent: who and how?
It is not clear to everyone who is responsible for paying personal income tax if it is necessary to change the broker and transfer funds from one account to another. On this issue, the laws say the following: when transferring money from a broker to a broker between IIS, the first broker does not bear any responsibility. Since all assets have already “left” him, no obligations can arise, including tax withholding.
Old and new
It is no secret that even today some investors use IMS, which were open before the law came into force in 2015. In this case, they have a special settlement system. The first part of Article 219 of the Tax Code reveals the features of calculating deductions in paragraphs 1, 2, 3, 4.
In particular, the first paragraph applies to transactions in which the purchase of securities took place after January 1, 2014. But the second and third paragraph are devoted to income derived from IMS, for the conduct of which contracts were concluded until December 28, 2013.
Additionally, the mechanism for calculating the tax investment deduction was disclosed in a public letter written by the Federal Tax Service, submitted to the public in May 2015. The document is published under the number BS-4-11 / 8977.
What else to look for?
In November 2016, the Ministry of Finance issued another letter under the number 03-04-06 / 67741. It indicated that tax agents are required to comply with the first paragraph of article 219, in particular, the first subparagraph, and in the future, be guided by it, calculating taxes payable on individuals conducting IIAs.
If an individual has filed a statement from which it follows that it is necessary to calculate and provide a tax deduction, and the paper arrived when the tax period has already ended, the agent must make a deduction, evaluating the financial result for the tax period.
Investment tax deduction: simpler than it sounds
The bureaucracy is frightening, and when it comes to a tax deduction, the receipt of which involves requesting 2 personal income tax, drawing up 3 personal income tax, writing a statement and collecting supporting documents, others can save, being afraid of paperwork. Fortunately, not so long ago the problem was resolved.
If you visit the official website of the tax service, you can find on it a program designed to calculate tax deductions. Through it, you can calculate everything that is supposed to be - both property and investment, other types of deductions. Here you can fill in all the fields from which the program will automatically generate an application for tax service. In fact, the main task of an individual is to correctly enter all the data in the signed fields of the program, and then send the document to the relevant state authorities responsible for paying taxes and refunding the deduction.