Since 2015, movable property has been classified as preferential property for tax purposes.

What kind of benefits

Tax legislation establishes property tax benefits for certain categories of organizations, as well as for certain types of property (Article 381 of the Tax Code of the Russian Federation). Property tax benefits can be federal and regional. For example, they are provided for specialized prosthetic and orthopedic enterprises, bar associations, legal consultations, government research centers, etc. (Article 381 of the Tax Code of the Russian Federation).

Property classified as privileged and therefore exempt from tax is excluded from the calculation of the tax base. At the same time, it must still be indicated in the tax return and in the calculation of advance payments, regardless of the benefit. An exception is made only for objects that are not recognized as subject to taxation. They do not need to be reflected in the reporting (clause 4 of article 374 of the Tax Code of the Russian Federation).

Rules for applying for tax benefits for individuals and legal entities

This is how people applying for tax benefits act:

• collect the necessary package of documents, consisting of papers for ownership of property and benefits applied to it, as well as a passport of the Russian Federation;
• bring it to the nearby Tax Service office;
• write an application for property tax benefits.

The completed application is submitted to employees of the Federal Tax Service:

• in person at the office;
• sent by mail;
• using the Internet, leaving a corresponding application on the official website of the Tax Service.

The following documents serve as evidence of benefits due to the taxpayer:

• on conferring the title of Hero;
• ID card of a pensioner, war veteran or disabled person;
• certificate confirming the death of the breadwinner.

The papers are collected in advance and submitted to the Federal Tax Service before November. If you do not meet the deadline, you may not count on property tax benefits next year.

Special order

It is clear that property tax for preferential property in 2019 is calculated in a special manner. The average or average annual cost of preferential fixed assets must be calculated separately. This should be done in the general order.

For more information, see “Calculation of property tax based on average annual value.”

Let us note that preferential property used in the extraction of hydrocarbons in offshore fields does not need to be taken into account when determining the average cost (clause 4 of Article 382 of the Tax Code of the Russian Federation).

If the organization is entitled to a benefit, then the amount of advance payments must be determined using the formula (subclause 11, clause 5.3 of the Procedure for filling out the calculation of advance payments, approved by order of the Federal Tax Service dated March 31, 2017 No. ММВ-7-21/271):

Advance payment of property tax for the reporting period (1st quarter, half year, nine months) = (Average value of property for the reporting period (excluding property, the tax base for which is determined as cadastral value) – Average value of preferential property for the reporting period (excluding accounting for property, the tax base for which is determined as the cadastral value)) × Tax rate ÷ 4

The amount of tax for the year at the average annual cost must be calculated using the formula (subclause 3, clause 4.2, clause 5.3 of the Procedure for filling out the calculation of advance payments, approved by order of the Federal Tax Service dated March 31, 2017 No. ММВ-7-21/271):

The amount of property tax that is payable at the end of the year = (Average annual value of property for the tax period (excluding property, the tax base for which is determined as cadastral value) – Average annual value of preferential property for the tax period (excluding property, the tax base for which determined as cadastral value)) × Tax rate – Advance payments for property tax accrued for the first quarter, half a year, nine months (without payments accrued on property, the tax base for which is determined as cadastral value)

Property tax beneficiaries

Benefits apply to the following organizations:

• using property for charitable purposes;
• preaching religion;
• included in the development of innovative technologies;
• possessing property of the criminal procedure system;
• producing medicines;
• located in special economic zones (SEZ);
• shipyards;
• organizations of disabled people.

How do benefits apply to individuals? Article 32 of the Tax Code of the Russian Federation talks about this.

According to it, privileges will be given to:

• citizens who have been awarded the title of Hero of the Soviet Union or Russia;
• those who have earned the Order of Glory;
• when assigned a disability group of at least third or disabled since childhood;
• participants in the Chernobyl accident;
• citizens affected by radiation;
• participated in operations to protect the interests of the Soviet Union;
• citizens discharged from the Armed Forces after 20 years of service;
• if a serviceman’s family loses its breadwinner;
• taxpayers who tested nuclear weapons;
• retired people;
• creative workers whose property is used in their professional activities;
• citizens who were members of the KGB, the Ministry of Internal Affairs, the IMF during the Patriotic War of 1941;
• People who have outbuildings with an area of ​​less than 50 square meters.

The benefit is provided for property whose cadastral value is less than 300 million rubles. This applies to individuals who own the following property:

• apartment, house or room;
• premises for household needs;
• outbuildings (greenhouse, bathhouse);
• garage box or parking space.

If the listed property is used for commercial purposes, you will not be able to take advantage of this state benefit.

According to the cadastre

A company subject to the exemption may have real estate assets, the tax base for which is determined as the cadastral value. In this case, the quarterly amount of the advance payment for property tax must be calculated using the formula:

Advance payment of property tax for the reporting period (1st, 2nd, 3rd quarter) = (Cadastral value of property as of January 1 of the reporting year – Non-taxable cadastral value of property as of January 1 of the reporting year) × Tax rate: 4

The annual property tax with preferential property 2021, the tax base of which is determined by cadastral value, is determined as follows:

The amount of property tax that is payable at the end of the year = (Cadastral value of property as of January 1 of the reporting year – Non-taxable cadastral value of property as of January 1 of the reporting year) × Tax rate – Advance payments for property tax accrued for 1, 2, 3 quarter.

Dynamics of growth of tax rates

What has changed in the Russian tax system? Legal entities should pay attention to the changes affecting the use of cadastral value for buildings:

• In which representatives of foreign companies were temporarily housed.
• Administrations, when calculating the value of land, take into account the purpose of its use, and not just the actual price.
• Intended for the placement of offices, catering and provision of personal services to citizens. In this case, only a fifth of the used area in which the production process takes place is considered.

The property tax rate is:

• in Moscow – 2%;
• in the constituent entities of the Federation – 1–1.5%.

For the apartment in which a person lives, the tax authorities take 0.1%. The state plans to raise this rate to 1% by 2020. Owners of private houses will have to pay 0.3–1.5% for the land on which the residential building is built. Local authorities may triple the rate. Compared to 2010, the payment of taxes on real estate has more than doubled.

Part of the property is not subject to taxation.

This includes:

• property owned by government agencies;
• radiation hazard objects: warehouses and production facilities;
• buildings recognized as cultural or historical property;
• nuclear-fueled seagoing vessels, including those operating in permanently ice-covered waters (icebreakers);
• property taken onto the organization’s balance sheet later than 2012, with the exception of real estate;
• objects of world sports competitions: Olympics, championships.

If a certificate of ownership is received, the person is recognized as a taxpayer. It doesn’t matter whether he represents an organization or is an individual. Tax is paid even on a person's share in property, or when it is transferred for a time.

Code of benefit for movable property in the calculation of property tax for the 1st quarter

A special coding for preferences for property tax of legal entities is indicated in their reporting on several lines at once.

1. In section 2 of the annual declaration regarding the average value of assets for the year:

• on line 160;
• on line 200, if the tax rate is reduced as part of the benefit;
• on line 240, if the amount of tax payable is reduced as part of the benefit.

1. In section 3 of the annual declaration regarding the cadastral value of assets:

• on line 040;
• on line 070, if the tax rate is reduced as part of the benefit;
• on line 120, if the amount of tax payable is reduced as part of the benefit.

1. In section 2 of the tax advance calculation in relation to the average value of assets for the year:

• on line 130;
• on line 160, if the tax rate is reduced as part of the benefit;
• on line 190, if the amount of tax payable is reduced as part of the benefit.

1. In section 3 of the calculation of the tax advance in relation to the cadastral value of assets:

• on line 040;
• on line 060, if the tax rate is reduced as part of the benefit;
• on line 100, if the amount of tax payable is reduced as part of the benefit.

Firms enjoy all-Russian preferences due to direct provisions of the Tax Code of the Russian Federation. The codes for federal benefits are reflected on line 160 of the annual declaration and on line 130 of the advance tax calculation. Codes often used in the reporting of commercial legal entities are shown in Table 1.

Table 1. Federal tax benefit code for property tax

Additional preferences are given to companies by the norms of regional legislation, and each subject of the Russian Federation has its own. The list of territorial benefits is given in Table 2.

Table 2. Regional property tax benefits 2018

Section 2 of reporting:

• if the tax rate is reduced - on line 200 of section 2 of the annual declaration and on line 160 of section 2 of the tax advance calculation;
• if the amount of tax payable is reduced - on line 240 of section 2 of the annual declaration and on line 190 of section 2 of the tax advance calculation;
• in other cases - on line 160 of section 2 of the annual declaration and on line 130 of section 2 of the tax advance calculation.

Section 3 reporting:

• if the tax rate is reduced - on line 070 of section 3 of the annual declaration and on line 060 of section 3 of the tax advance calculation;
• if the amount of tax payable is reduced - on line 120 of section 3 of the annual declaration and on line 100 of section 3 of the tax advance calculation;
• in other cases - according to line 040 of section 3 both in the annual declaration and in the calculation of the tax advance.

Regional codes of corporate property tax benefits are given in Table 3.

Table 3. Regional code of tax benefit for property tax

This code is entered in section 2 upon the fact that the company uses regional preferences in the form of exemption from property taxation or in the form of a reduction in the tax base:

• in the annual declaration - on line 160;
• in the calculation of tax advance - on line 130.

The second part of the code includes the number, clause and subclause of the article of the regional law that established the benefit for reducing the tax base.

In all regions not listed in the table, a mandatory tax on movable property will be introduced from 2021.

If the subject has not adopted a single regulatory act related to the tax rate, then citizens are required to pay 1.1%.

For organizations

Companies operating under the simplified tax system or UTII do not pay taxes on movable property. Small businesses are not subject to changes in Russian legislation.

The late adoption of the law on benefits improves the situation of taxpayers. They have the right to contact the Federal Tax Service for a refund of compensation. Entrepreneurs should carefully monitor information related to changes in legislation:

• there are opportunities to save money;
• There are risks of getting fined if a tax is introduced in the region and there are no benefits.

Information about new laws, including the abolition of the fee, is published on the official websites of the constituent entities of the Federation, as well as on legal portals.

For individuals

Certain categories of individuals are also exempt from paying taxes on movable property:

• large families;
• veterans;
• disabled people;
• persons who have farms as a source of income.

Please note that there are tax deductions for special categories of citizens. In particular, they are used for disabled people of the first and second groups.

Similar clarifications are given in letters of the Federal Tax Service of Russia dated December 20, 2019 No. BS-19-21/327 and the Ministry of Finance of Russia dated December 22, 2019 No. 03-05-04-01/85757.

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In Appendix 6 to the Procedure for filling out reports, officials approved the procedure for applying tax benefit code 2010257.

In the previous procedure for filling out reports, this code was not available. At the same time, there was no code to designate property that was not taxed in accordance with paragraph 25 of Article 381 of the Tax Code of the Russian Federation.

Accountants used code 2010257 to designate benefits on the basis of a letter from the Federal Tax Service dated December 12, 2014 N BS-4-11/ with a recommendation to designate movable property registered on January 1, 2013 and not taxed, but this code was not used in the procedure for filling out reports registered In Appendix 6 to the new procedure for filling out property tax calculations dated March 31, 2017.

Tax benefit code 2010257 has been added. In the new reporting forms, it is used, as before, to designate property that is not taxed on the basis of clause 25 of Article 381 of the Tax Code of the Russian Federation.

• provisions have been added to the Declaration and the procedure for filling it out to allow for changes in the cadastral value of the taxable object to be taken into account when calculating tax (Section 3 of the Declaration is supplemented with a line with code 095 “Coefficient Ki”);
• the procedure for filling out the declaration is supplemented with provisions that provide the possibility of calculating tax in the event of a change in the cadastral value of the taxable object.

1. The regions adopted laws that spelled out this benefit under code 2010257. At the same time, it must also indicate that it became property no earlier than 2013.
2. The regions adopted relevant laws and stated that there is no preferential taxation.
3. In this case, the tax rate in 2021 should not be higher than 1.1%.
4. The constituent entities of the Russian Federation have not adopted any laws on preferential taxation of movable property. As in the previous version, companies and enterprises will be required to pay tax, but not more than 1.1%.

• 21 – first quarter.
• 17 – half a year or two quarters.
• 18 – 9 months or three quarters.
• 51 – first quarter during liquidation or reorganization.
• 47 – half a year or two quarters during reorganization or liquidation.
• 48 – for 9 months or three quarters during reorganization and liquidation.
• 34 – property tax return for the whole year – 12 months.

• if the tax rate is reduced - on line 200 of section 2 of the annual declaration and on line 160 of section 2 of the tax advance calculation;
• if the amount of tax payable is reduced - on line 240 of section 2 of the annual declaration and on line 190 of section 2 of the tax advance calculation;
• in other cases - on line 160 of section 2 of the annual declaration and on line 130 of section 2 of the tax advance calculation.

Benefit codes for legal entities

Organizations pay tax in advance. Benefits for each payment are encrypted with a special code. All information about them is contained in letter No. BS-4-11/26159.

In 2021, the following designations apply:

• 2010257 - for property included in the fixed assets (fixed assets) of an enterprise, accounted for no earlier than January 2013. In the declaration submitted to the Tax Service, the code is indicated in line 130.
• 2010258 – for preferential treatment of objects located in a free economic zone (FEZ). According to the law, the preferential tax period lasts 9 years.

Tax benefits are beneficial not only to legal entities and individuals. The state also benefits. It gains recognition among citizens, allowing them to spend more money on personal needs. By reducing the tax burden on enterprises, it contributes to their rapid development, which improves the country’s economy.

Those who did not manage to apply for benefits on time will only receive a recalculation for the past 3 years. The safety of earned money is a person’s personal concern. No one will force benefits. To use them, you must submit an application to the Federal Tax Service in a timely manner and attach other documents.