Retiree tax: types, tax benefits and expert advice

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Paying certain taxes is the duty of every citizen of the Russian Federation. Even retired people are not completely exempted from it. A good example of this is VAT. We pay value added tax even from the smallest purchase in the store. But still, the state introduces a number of preferences for socially unprotected categories of citizens. Let's figure out what taxes are currently in effect on pensioners in the Russian Federation. We will also determine the amount of benefits, the conditions for their application.

Who is considered a pensioner?

Should pensioners pay taxes? Yes, like all Russian citizens. But there are a number of tax benefits and preferences for pensioners, which we will present later.

But who is considered a pensioner in Russia? According to domestic law, the following persons:

• Those who have reached a certain retirement age established for men and women, as well as separately for specific categories of military personnel, civil servants, employees of enterprises with difficult, harmful and life-threatening conditionslabor.
• According to the results of the medical and social examination recognized as disabled.
• Those who have lost their only source of livelihood in the face of one of their close relatives.

Who is the federal beneficiary?

It is also important to single out such a category of pensioners as federal beneficiaries. These are Russian citizens awarded the highest awards and titles of the Russian Federation and the USSR, disabled people and veterans of the Second World War, liquidators of nuclear and man-made accidents, military personnel who performed their duty in "hot spots", people affected by radiation.

Privileges that are provided to federal beneficiaries may differ from preferences for old-age pensioners, and are provided in an increased amount.

Income contributions

Speaking about the payment of taxes by pensioners, let's imagine the category of contributions from which they are exempt. Thus, all recipients of state pensions in the Russian Federation are not required to pay income tax on these benefits. Personal income tax is also not charged on all kinds of monetary compensation to these persons, paid on behalf of the state.

Federal beneficiaries and citizens receiving pensions for old age, disability or in case of loss of a breadwinner are exempted from income tax in Russia.

Conditions for working pensioners

In what order do working pensioners pay income tax (meaning officially employed citizens)? This category of persons under Russian law is required to pay personal income tax in relation to the following:

• Salary.
• Remuneration for labor received under the terms of a contract for an author's order and other creative activities.
• Dividends, interest and other income from the ownership and circulation of securities.
• Pensions that are paid in accordance with non-state pension insurance agreements concluded in relation to these persons by employers.
• Pensions that are paid in accordance with non-state pension insurance agreements concluded by citizens themselves.
• Receiving rent from renting out your own property, property for rent.
• Other income received in Russia.

It is important to note that, if there are appropriate expenses, working pensioners, like other Russian citizens, have the right to make a personal income tax deduction.

Property taxes

Introducing tax breaks for pensioners, we need to touch on this category as well. Citizens of retirement age are exempt from paying property tax. In relation to the buildings, structures and premises they own. At the same time, the basis for assigning a pension does not matter here. A person applying for a benefit can receive a pension for both old age and disability.

This is dictated by the Tax Code, which is binding on the entire territory of the Russian Federation. In addition to this, the local government structure may also introduce its own system of benefits for pensioners.

How was it before?

But here it is important to keep in mind one thing: the pensioner is completely exempt from payingproperty tax only in respect of one real estate object owned by him. Recall that until 2015, the scope of preferences for pensioners in this area was wider: this category of citizens was completely exempt from paying property tax on all immovable objects owned by right of ownership.

Therefore, today, if a pensioner owns several apartments, private houses, garages, outbuildings, he must choose only one object from his property for use in relation to him benefits. A citizen is obliged to notify the Federal Tax Service of such a decision by November 1 of the current year. If he does not do this, then the benefit will automatically apply to the immovable object with the highest amount of taxation.

Retirees pay taxes in this order for a reason. Before the adoption of new provisions, many citizens transferred real estate objects to their elderly relatives, although in fact pensioners were not their owners. This was done for selfish purposes: to avoid paying property tax.

Who gets the preference?

Speaking of the property tax benefit for pensioners, let's list the categories of citizens for whom it applies:

• Old-age pensioners. Or citizens who retired due to disability.
• Children with disabilities (persons with disabilities since childhood), disabled people of the 1st and 2nd category.
• Federal beneficiaries.
• Former pensionersmilitary personnel, as well as members of their families left without a breadwinner.

Land fees

What benefits are introduced for land tax pensioners? It is worth noting that it is local, it is assembled by the forces of the local self-government structure, and not by the federal government. But at the same time, in 2018, at the federal level, it was established that the land tax from pensioners is levied on a preferential basis. But here it is important that the allotment owned by the citizen should be less than 6 acres (600 square meters). The tax itself is deducted based on the cadastral value of such a plot.

However, these are not all benefits for land tax pensioners. Additional preferences may be introduced by regulatory legal acts of various Russian municipalities. They are region specific. They can reach the complete abolition of taxes from pensioners in relation to land plots of any area.

Up-to-date information on this issue can be obtained from the local administration or the branch of the Federal Tax Service at your registration. This type of benefit is not automatically granted - you will be required to complete an application and provide the required documentation.

Land tax exceptions

Thus, pensioners of all categories pay land tax only for the land they own or use indefinitely. But they are completely exempt from tax in respect of land plots:

• Rented.
• Received at no chargeuse.

In addition, retirees with disabilities and federal beneficiaries at the state level have the right to deduct land tax. Its maximum amount is 10,000 rubles.

Old-age pensioners are en titled to land tax benefits (if the plot area does not exceed 6 acres) in the following regions:

• St. Petersburg and the Leningrad region.
• Samara region.
• Perm Territory.
• Saratov region.
• Novosibirsk region.
• Rostov region.
• Volgograd region.

Transport fees

What is the car tax for pensioners? It is important to note that transport tax collections are classified as regional. Because of this, they are put into effect in accordance with the laws of Russian subjects. Accordingly, they operate only on their territory. Citizens pay such taxes to the regional, not the federal budget.

Who is the payer here? According to Russian tax legislation, these are citizens in whose name vehicles are registered. The objects of taxation here are cars, motorcycles, scooters, etc. The tax base here is determined by the engine power of the car, measured in horsepower.

As for the exceptions, the owners of the following cars are exempt from transport tax:

• Vehicles specially equipped/converted for use by persons with disabilities.
• Cars issuedsocial services, with engine power up to 100 hp

Conditions for pensioners

What about levying this tax on retirees? Since the collection is regional, the benefits for certain categories of the population, respectively, are established by the authorities of the subjects of the federation. That is why they cannot be the same for all of Russia. You can get all the necessary information about the presence / absence of benefits for pensioners on transport tax in your region at the local branch of the Federal Tax Service or on its official website.

It is important to understand that such benefits are not automatically granted to pensioners. It is necessary to submit an application to the Federal Tax Service, back it up with certain documents. If everything is presented correctly and in the right order, the citizen will be assigned the appropriate tax benefit.

Where is the preference given?

Do pensioners pay taxes? As we have seen, yes. But these citizens need to know that the state has introduced certain benefits for them in relation to the payment of a number of taxes.

As for the transport category, here preferences for pensioners are valid in the following cities (and areas to which they belong):

• Moscow.
• St. Petersburg.
• Yekaterinburg.
• Krasnoyarsk.
• Perm.
• Chelyabinsk.
• Samara.

The above cities and towns listed below have an additional vehicle tax relief for the federal beneficiary and disabled category:

• Sevastopol and Crimea.
• Tatarstan.
• Moscow and the Moscow region.
• Nizhny Novgorod region.
• Volgograd region.
• Saratov region.
• Omsk region.
• Rostov region.

Deductions for working pensioners

A working retiree is eligible for standard tax deductions in the following cases:

• He was a participant in hostilities.
• Participated in liquidation activities in man-made, radiation accidents.
• Experienced by radiation.
• Has minor children.

The size of the deductions here directly depends on which category it belongs to.

Social deductions are provided for the following expenses during the current year:

• Education.
• Treatment.
• Purchasing prescription drugs.
• Purchasing a VHI policy.
• Conclusion of an agreement with NPFs on co-financing of pensions.

The amount of this tax deduction depends on the specific costs. But cannot exceed the limits set by the government.

Also, pensioners are provided with a property tax deduction - upon the fact of buying / selling real estate. It can be carried over for up to 3 years. If the pensioner has no other income subject to personal income tax.

In Russia, pensioners are not exempt from all taxes. But the state and regional, local authorities introduce special benefits for this category of the population, preferences in relation topaying taxes.