LETTER OF THE FEDERAL TAX SERVICE OF THE RUSSIAN FEDERATION

of September 18, 2013 No. BS-4-11/16779 @

About procedure for application of provisions of the Federal Law of 23.07.2013 No. 212-FZ

The Federal Tax Service directs for data and use in work the letter of the Ministry of Finance of the Russian Federation of 13.09.2013 No. 03-04-07/37870 concerning procedure for application of provisions of the Federal Law of 23.07.2013 No. 212-FZ "About modification of Article 220 parts two of the Tax Code of the Russian Federation".

Bring the specified letter to subordinate tax authorities.

Appendix

Letter of the Ministry of Finance of the Russian Federation

of September 13, 2013 No. 03-04-07/37870

The department of tax and customs and tariff policy considered the letter of FNS of Russia of 19.08.2013 No. AC-4-11/14978 concerning procedure for application of provisions of the Federal Law of 23.07.2013 No. 212-FZ "About modification of Article 220 parts two of the Tax Code of the Russian Federation" and reports the following.

According to Item 1 of article 2 of the specified Federal Law it becomes effective not earlier than after one month from the date of its official publication and not earlier than the 1st of the next tax period on income tax. Considering that this Federal Law (further - the Federal Law No. 212-FZ) is published in "The Russian newspaper" of 26.07.2013 No. 163 and tax period on income tax is calendar year, the Federal Law No. 212-FZ will become effective since January 1, 2014.

On provision of property tax deduction in this case it is necessary to understand emergence of the right of the taxpayer to receipt of property tax deduction after entry into force of the Federal Law No. 212-FZ as legal relationship, that is after January 1, 2014.

With respect thereto taxpayers are granted the right to property tax deduction on expenses on acquisition of real estate object and property tax deduction on expenses on interest payment on target loan (credit) directed to acquisition of the same object or other real estate object.

Besides, by Item 6 of article 1 of the Federal Law No. 212-FZ it is determined that the right to the property tax deductions provided by the above-stated subitems 3 and 4 of Item 1 of this Federal Law No. 212-FZ is provided to the taxpayers who are parents (adoptive parents, adoptive parents, guardians, custodians) and performing new construction or acquisition in the territory of the Russian Federation at the expense of own means of the apartment house, apartment, room or share (shares) in them, acquisition of the parcels of land or share (shares) in them presented for individual housing construction, and the parcels of land or share (shares) in them on which acquired apartment houses or share (shares) in them, in property of the children aged up to 18 years are located (wards aged up to 18 years).

In this case property tax deduction can be provided to those taxpayers, to children (wards) of which 18 years at the time of emergence at them of the property right to real estate object were not performed.

According to Item 11 of article 1 of the Federal Law No. 212-FZ repeated provision of the property tax deductions provided by the specified subitems 3 and 4 of Item 1 of article 1 of this Federal Law is not allowed.

In this regard property tax deduction according to the procedure, provided by the Federal Law No. 212-FZ, can be provided in case of observance of two compulsory provisions:

- the taxpayer did not receive property tax deduction earlier;

- the documents confirming emergence of the property right to object (or the deed of conveyance - in case of acquisition of rights object of shared-equity construction), based on Items 1 and 2 of article 2 of the Federal Law No. 212-FZ shall be drawn up after January 1, 2014.

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