Do you know what stamp duty is? If not, then it means that you have never encountered the purchase and sale of securities or made transactions with real estate. Unfortunately, in Russia the tax and legal literacy of the population is by no means at a high level. Therefore, our article will be useful to many.
What is stamp duty?
The tax system seems to the Russians to be a "Chinese letter", most of us cannot imagine how much taxes we pay to the state treasury, and all the more so we are not interested in the tax system of other countries. Stamp duty still raises a lot of questions among experts; they cannot decide which category it belongs to - duties or taxes. After all, it fits the definition of both at the same time.
It can be said that stamp duty is a special tax that the state levies on private and legal entities for transactions with real estate and securities. It is paid without fail when applying to state institutions.
How is tax paid?
Stamp duty is a one-of-a-kind tax whose payment is confirmed by official papers or seals. As a matter of fact, this tax also received its name for the same reason. Initially, its payment was confirmed by the issuance of special stamped paper with a stamp or seal. The actual stamp duty is taken for confirmation by the state of any actions of its citizens.
Stamp Accrual System
Each state independently on the basis of the adopted legislative framework establishes a system of accrual of stamp duty. In some countries, it is a kind of tax on value and is charged as a percentage of the amount spent on the purchase. Other states set a fixed amount, which varies depending on the transaction.
Stamp duty can be paid by both parties to the transaction, or one. This is also regulated at the legislative level. Usually, the state carefully monitors the payment of this tax, in case of violations identified, an individual or legal entity can wait for criminal prosecution.
This practice is quite common abroad, and in recent years in Europe there has been a tendency to change in the tax system. Europeans are horrified to see it tightened, which will significantly affect their well-being in the context of the economic crisis.
Russia: Stamp Story
If you are interested in when the stamp duty was established in our country, then it is worth a look into the distant seventeenth century. The first to establish this tax was Peter I, issuing a special paper with a seal. Over the next years, tax legislation evolved, and by the nineteenth century the stamp duty in Russia had finally become fixed in the form of tax.
The Ministry of Finance was in charge of collecting this tax; it also monitored the implementation of the law and identified non-payers. At the beginning of the twentieth century, stamp duty became a rather complicated system. It was divided into simple, having five classifications, and proportional, subdivided into an even more complex and ramified structure.
The tax was paid using state-issued stamps. In pre-revolutionary Russia, about thirty-six brands of various types were produced; they were used until the twenties of the last century.
Stamp duty in modern Russia
The Soviet Union sought to change the royal system of stamp duty, so it was replaced by a single duty that lasted until the nineties of the last century. After the collapse of the USSR, the government of our country returned to the practice of collecting stamp duty, but this only concerned transactions with securities. The purchase and sale of land plots and real estate no longer involved the payment of stamp duty.
Currently, Russia has a separate tax on transactions with real estate and securities. Stamp duty citizens of our country do not pay.
USA: the role of stamp duty in the history of the country
The United States and Canada are countries where the population does not pay stamp duty. There is a different tax system. But once this tax played the role of a catalyst that radically changed the course of events in the American colonies.
Many historians believe that the stamp duty of 1765 was the last straw that outweighed the patience of the colonists, who began to seriously think about separation from England. The fact is that the UK during this period experienced a severe budget deficit and tried to cover it with the introduction of new taxes. Naturally, the colonies suffered the most from them. Tax oppression already caused a lot of protests among the population of the North American colonies, but most of the money went to the needs and development of the settlements themselves, so the protests were quenched by the authorities. But in 1765, the stamp duty act was passed, which future Americans had to pay for almost all items and goods purchased in America. This caused a storm of protest, the unrest in Boston was especially noticeable. The law on stamp duty pushed the townspeople to take to the streets of the city with posters and slogans. They were outraged by the fact that the tax would go completely to the treasury of Great Britain. In addition, this stamp duty was five times higher than a similar tax in Britain itself.
Ultimately, after a wave of demonstrations swept through the country, the law on exorbitant tax was not adopted. Until now, stamp duty in the United States has not been paid by citizens of the country and migrants living in the state and without citizenship.
UK: tax system
UK stamp duty applies only to real estate transactions. It is paid by individuals and legal entities when buying or selling apartments, land plots, industrial premises and residential buildings. In any case, the British will be forced to pay this state duty, as they call this tax. To one degree or another, it has been present in the life of the English since the end of the seventeenth century. It was then that the stamp duty was first applied.
In the UK, it is charged on a special scale as a percentage of the purchase amount. It is worth noting that the tax is a fairly flexible unit; it ranges from 2 to 14%. The higher the purchase price, the more money you will have to pay a resident of Misty Albion.
At first, the system was imperfect, and with a slight transition from one category, the amount of the purchase to another tax increased significantly. In 2014, the accrual scale was edited and became more equitable.
In 2015, the UK government passed a law requiring the payment of an additional stamp duty in the event that the purchase amount exceeds 40,000 euros, the buyer will be forced to pay an additional 3% of the purchase price additionally. In Britain, tax is the responsibility of the buyer.
Who in the UK can not pay tax?
Naturally, there is a category of population that is exempt from stamp duty. In the UK, this is only possible if you receive the property as a gift or by inheritance. The entry into the right to use real estate as a result of the division of property in the divorce proceedings belongs to the same category.
In all other cases, when dealing with real estate, you must pay tax. And only in case of presentation of documents on payment you can get a certificate of ownership of the property.
Stamp duty calculation in Britain: who does it?
Surprisingly, in the country there are no special institutions involved in the calculation and control of the payment of stamp duty. This function is entrusted to the British themselves. The fact is that usually lawyers deal with all real estate transactions. The amount of their fee just includes tax calculation, they do it using a special calculator.
According to the law, stamp duty must be paid up to thirty days after the transaction enters into force. On any day, the Briton can pay the required amount and receive the long-awaited certificate confirming ownership of the property. An amendment to the stamp duty law is currently under consideration. The tax payment period is planned to be reduced to two weeks. Dates for companies and individuals are identical, but for legal entities the tax is charged a little differently.