Explanation of the Ministry of revenue
The amount of insurance compensation, transferred to the bank by the insurance company as a credit repayment by individual for the purchased property that is involved in a road traffic accident, is included in the total monthly (annual) taxable income of the individual on general grounds, as referred to on the site of the Ministry of revenue.
In this situation, the terms of the insurance contract on movable property, which was purchased by an individual in credit, provide that the bank is beneficiary if the insured event occurs. The amount of insurance compensation is transferred by insurance company to the bank, which at its own expense repays part of the taxpayer’s credit. In this case, the bank provides an individual with additional benefit in the form of part of credit repayment. The Bank shall perform all the functions of a tax agent as established by the Tax Code.
