Tax on the sale of a car
The contract of purchase – sale of a car is usually associated with the payment of tax, which is the responsibility of the buyer, i.e. the new owner of the vehicle. Sometimes, however, persistence in such a belief can lead to painful consequences. It turns out that the seller is not always exempt from tax settlement. The exception is the situation when the sale took place within 6 months from the end of the month in which we purchased the car. Explaining that we actually suffered a loss, because the buyer did not pay us the same amount as we spent on the purchase, will not do anything. It does not matter whether the seller has gained or lost from the transaction.
Calculation of the deadline
If the sale of the car took place earlier than after six months, we should meet the tax obligation. It is worth noting here the calculation of this six-month period. What is important, it starts on the first day of the month following the month in which we bought the car. For example, if the transaction took place on 14 April, the six-month period will end on 31 October. Proper calculation of this period is important in order to avoid falling into a ‘trap’ and unjustifiably exempt oneself from due tax, which will have unpleasant consequences. If the purchase took place in the first days of the month, this period is in fact almost 7 months!
The sale of a car must be indicated on the tax return form 36. We file the tax return no later than 30 April of the year following the year of sale. At the same time, we will pay any tax at the same time. Taxpayers who have previously settled their tax return on the tax return form 37 do not submit it in this situation. Any income they have earned from employment contracts is also entered in the tax return form (36) and summed up there. If you have used the online tax return form, you can also file your tax return 36 using the online tax return program. The sale of a car is shown under the heading “Income and loss” under “source company”. Remember that the tax office imposes fines. According to art. 54 §1 and 2 of the Fiscal Penal Code, for failure to meet the obligation to pay tax, there is a fine of up to 720 daily rates, and even a penalty of restriction or imprisonment.
The basis for calculating the tax on the sale of a car is the difference between the revenue and the cost of obtaining it. The amount of income is determined on the basis of a concluded agreement. However, if a situation arises in which the amount of tax differs significantly from the current market value of the vehicle, the tax office may not recognise it. In practice, tax deductible costs are expenses incurred after the purchase of a car, e.g. for repairs or modernizations. We can include such expenses in the “tax deductible costs” item of the form. These must be documented expenses, e.g. workshop repair costs, costs of purchasing parts, costs of gas installation, etc. This will allow you to reduce your income. If it turns out that the sale transaction has resulted in a loss, he will not pay tax. The loss that will be shown on the tax return will be deductible from your income in the next five years. If the taxpayer gains from the sale of the vehicle, the tax should be calculated according to a tax scale of 18% or 32%. Its amount in a given case depends on the value of income obtained in the previous tax year. To the amount of USD 85,528, it will be 8% (minus the tax-free amount), above that the rate will increase to 32%.
Advice on tax settlements comes from the portal . Thanks to PITax, you can easily and free of charge settle this year’s PIT online.
Tax on the sale of a car