Income tax deductions: a new procedure for obtaining and fines

LEGAL DIGEST, NEWS \ 25.06.2021

The President of the Russian Federation has signed a Law that simplifies the procedure for granting income tax deductions and fixes fines for violating the established procedure.

The new procedure applies to the following income tax deductions:

• property (construction or purchase of residential houses or apartments, purchase of land plots, repayment of interest on target loans and credits actually spent on new construction);
• investment (operations on an individual investment account);
• social (medical treatment and education).

According to the text of the Law, there are two main changes.

Provision of property and investment deductions in a simplified procedure. According to the amendments, starting from May 21, 2021, a taxpayer, in order to receive a deduction, has to send a corresponding application to the tax authority through the personal account on the website of the Federal Tax Service (FTS). The document should specify the details of the taxpayer’s bank account.

Check of compliance with the requirements for obtaining a deduction is carried out in the form of desk audit. If no violations are found based on its results, the tax authority decides to grant a deduction within three calendar days after the end of the audit. Based on the decision made by the FTS authorities, the amount of tax to be refunded to the taxpayer to the bank account specified in the application is determined.

The decision on the right to deduction is sent to the taxpayer through the personal account not later than three days from the date of the relevant decision. The FTS has to make the specified payment within 30 calendar days from the date of sending this decision.

For providing inaccurate information by the bank about the actual expenses incurred as part of receiving the deduction, the organization faces a fine of 20% of the amount of tax overpaid to the taxpayer.

Confirmation of the social deduction. In accordance with the new provisions, the employee will not have to bring a paper notification of the right to social deductions to the accounting department. After checking the information, the FTS itself will send a notification to the employer through the telecommunications link.

In the matters of granting tax deductions, please contact Acsour experts. Our specialists are ready to answer your questions on this topic.