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As more and more questions arise in society about different tax payment regimes, professionals warn that it is worth paying attention and following the information about paying taxes.
Here, Rasa Virvilienė, Director of the Legal Department of the State Tax Inspectorate, reports that people who sell a car, for example, cannot avoid the tax burden.
“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, ”said the ITS specialist.
Warns of scams
However, there are still some scams in some business sectors, with no exceptions and car sales. ITS specialists warn against fraud.
“The ITS notes that there are cases where a resident is asked to indicate a lower purchase price than what they actually pay when purchasing a car.
If such resident subsequently sells the car, if less than 3 years have elapsed since its purchase, the higher selling price may result in an obligation to pay personal income tax. For this reason, when handling car sales documents, we urge residents to indicate the purchase price of the car in good faith, “said the specialist.
Also, it’s worth noting the contract that the car dealer instructs the buyer to complete. According to experts, residents often unknowingly contribute to tax evasion.
“Unscrupulous sellers mislead the population not only by asking for a reduced sale price, but also by introducing fictitious purchase and sale agreements for foreign vehicles. Residents may unknowingly contribute to forgery of documents and be part of a scheme of tax evasion.
By signing such a contract, the resident helps the car dealer hide the income. The document states that the seller of the vehicle is a foreigner, the details of its reseller are not recorded in any document, and the proceeds from the sale of the car are simply hidden by the actual seller, not paying the taxes owed. The buyer who signs the counterfeit contract also loses all the seller’s guarantees, as he has no evidence that the car was purchased from a Lithuanian citizen.
The STI points out that documents indicating unrealistic circumstances (reduced purchase price, false sellers data, etc.) should be evaluated as falsified, and their execution carries criminal liability, “said R. Virvilienė.
Vehicle registration
STI representatives advise residents planning to purchase another vehicle to use the contract form, which can be found on the SE Regitra website.
It is noted that when completing the contract, it is important to pay attention to the essential facts: it is necessary to indicate the actual details of the seller and the buyer, the price of the car, the mileage, the defects, as well as record the fact of the money transfer written. In the event of a dispute, both the seller and the buyer will subsequently have important evidence that can help resolve the disagreement.
Selling a home is no exception
According to experts, it is worth noting the payment of taxes, and in the case of real estate for sale, it is true that there are certain reservations.
“After selling a home, you are required to declare income and pay personal income tax (PIT) on the difference between the sale and purchase price when the property is sold at a higher price than what was purchased without keep it on your property for 10 years, “said R. Virvilienė.
In addition, the specialist emphasizes that it is worth paying attention to the personal items sold. Exceeding the amount specified in the laws, reaching 2.5 thousand. Tax will be required.
“In cases where residents sell their personal belongings (for example, their own clothes or those of their children that are no longer used, etc.), it is not necessary to pay taxes if the” profit “(price difference between the purchase and sale of goods) is less than 2.5 thousand per year euros
As such items are generally sold much cheaper than they were purchased, only in exceptional cases is this amount exceeded. To avoid misunderstandings, the STI recommends that you always keep your purchase receipts, “said the interlocutor.
Part of the cost can be recovered
Representatives of the State Tax Inspection emphasize that as of 2019, the benefit of the personal income tax (PIT) is valid for residents who have purchased housing, car repair or childcare services. This means that residents can recover part of the cost.
According to the STI, residents can currently still recover up to € 400 from GPM if they were provided with such services last year. To take advantage of this benefit, residents can submit an expense report to the online tax administrator on form PRC912 or expenses by indicating it in the tax declaration wizard.
State Tax Inspection (Photo Day / Justinas Auškelis)
When declaring the expenses incurred, it will be necessary to obtain the documents that prove them: a scanned or photographed invoice, a VAT invoice or a receipt for the sale of goods (services) (form FR0508).
According to the STI, the majority of requests, almost 71%, are filed by residents seeking to recover 347,000. EUR GPM for car repairs.
Residents can find all relevant information on tax matters by calling the specialists at the Tax Information Center at 1882.
The STI also recalls that residents can report various observed tax violations by calling 1882, also by completing the electronic form on the website www.vmi.lt, or by downloading the “Pranešk” smartphone application.
According to the latest data, 33 thousand. population sold real estate and 46 thousand. Residents who sold a car last year have yet to file tax returns. They need to do this before July 1.
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