Russia slaps 35% tax on ultra-low car loan deals from 2024
Russian tax authorities have cracked down on ultra-low-interest car loans, declaring rates of 0â0.01% illegal. The move comes as new legislation targets loans with interest far below the Central Bank's benchmark. Buyers who took out such deals in 2024 may now face a 35% tax on their interest savings.
The Federal Tax Service (FNS) announced that loans with interest rates below two-thirds of the Central Bank's key rate will trigger a personal income tax of 35%. This rule applies specifically to loans from employers or related parties, not standard bank financing. Most buyers who secured zero-interest deals through banks will remain unaffected.
Many zero-interest offers were marketed as 0.01% loans but came with strict conditions. For example, the BelGee X50 required a down payment of at least 1,628,193 rubles and monthly payments of 58,152 rubles over a year. Such terms often demanded 70â80% of the car's price upfront, making them unrealistic for average buyers. The FNS clarified that the taxable savings only apply to loans where the lender is connected to the borrower. Standard bank loans, even at ultra-low rates, will not incur the additional tax. The new rules aim to close loopholes in employer-provided financing schemes.
The tax will now apply to buyers who secured zero-interest loans from related parties in 2024. Those affected must pay 35% on the interest they saved under the old terms. The FNS has confirmed it will enforce the new tax rules moving forward.
