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The man assures that he understands that ignorance does not exempt him from responsibility, but the situation itself has angered him.
“My story started 2.5 years ago when we bought a car. Admittedly, the car was defective, so there was still considerable expense for parts and labor. I did a lot of work myself, saving money. Last year, the family grew and we looked for a bigger car, so we sold the repaired one.
Without a doubt we sold at a higher price than we bought because everything was fixed and there was no defect. This year, when declaring income, the ITS collected more than 500 euros. taxes that I have to pay the state ”, the man began to tell his story.
I didn’t understand where that amount came from
Not knowing where such a paid amount came from, the man began to explain. He received a similar response from ITS as 15 minutes. The man had sold the car less than three years after its purchase, for which he had to pay part of the income tax.
“Under the Personal Income Tax Act, income from the sale of a car that has been held for 3 years or more is tax free. The tax return and taxes must be submitted no later than 3 years between the purchase and sale of the vehicle. 15 percent Income tax is applied to the difference between the sale price and the purchase price of the car.
Car repair costs are not included in the purchase price of the car “, 15 minutes said Rasa Virvilienė, Director of the ITS Legal Department.
“Such is the law”
The man says that he did not know this information because he changes the car very rarely, and now he has due to the increase in the family.
“I explained to the STI that the car was purchased with a defect, that many details were needed and that everything required a lot of work, that it is not possible to estimate the quantities because the condition of the cars is different.” I assured him that it is not logical to pay him the specified fee, “says the man.
He said the effort was worthless and continued to receive the same response: “That is the law.”
“I think there are loopholes in the law and this is how people are robbed.” If you bought a car frame for a few hundred euros and fixed everything and sold it for a few or tens of thousands, would the state have to pay thousands in taxes?
I think the law should be adjusted. Ignorance of the law does not exempt from responsibility, I understand, but you do not know all the laws, especially when you are in an unknown field for the first time, “says the man.
He claims that if he had known, he would have driven the car for half a year and only then would he have sold it. This would also have avoided the tax.
Could offset repair costs
Assistant attorney Osvaldas Raščiukevičius emphasizes that the expenses incurred for repairing or upgrading the car cannot be deducted from the taxable amount, so the reader cannot change anything in this situation.
“In this case, the STI will not change anything, although the client expects it, because the STI only implements the laws, and they are adopted by the legislator, the Seimas of the Republic of Lithuania. However, I hope this is a useful lesson for this and other readers in the future. Even more so when the reader writes that he bought the car with the defects and repaired them himself. It was in this place that the reader had to demand civil liability from the seller, which again would have allowed to avoid such a situation “, explains O. Raščiukevičius.
According to him, civil liability in this case would have helped cover the cost of the repairs.
“The point is that it would not have reduced the tax, but the buyer could have claimed the cost of their repairs, so at least at that time they would not have incurred the costs.
Because again, in terms of taxes, nobody cares about what happened there, they just have an interesting difference and the income tax is calculated from it. Again, such a situation must be taken into account, but the provision of the law in this case is quite defined, “said O. Raščiukevičius.
The law is not perfect
He claims that the law is a law, but he agrees that it is not perfect, since there are very different situations in which said procedure to calculate this tax is not very fair.
“After all, even in the case of individual activities, the benefit is calculated by deducting the costs incurred, and the non-verifiable minimum expenses are 30%.
Of course, in this case the reader does not carry out any activity, therefore the legislator probably considers that he does not incur any costs to carry out the activity, but various situations arise, such as this, “says O. Raščiukevičius.
How to prevent scams?
O.Raščiukevičius also informs that in the purchase-sale agreement it is necessary to write the real price paid for the car, because the difference between the purchase and sale prices is not determined from something else, but from the purchase agreements- sale.
Probably, many are aware of the situation where the seller asks for a lower price and therefore forces you to pay lower income tax, but when the seller avoids the tax, this burden increases for the buyer unless you intend to keep the car in your possession for 3 years.
Incidentally, registering the real price of the car in the contract also works in other cases, especially when selling a car with a lot of defects, and to return it, the seller offers to return the price registered in the sale contract.
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