The issue of taxation is always acute for taxpayers of both individuals and legal entities. Real estate is no exception, which is also subject to taxation. Today we will reveal the question: “Сan the State Tax Service find out that you are renting an apartment?“
Let’s start with the fact that almost any income of citizens (not businesses) is taxed: at a rate of 18% personal income tax and 1.5% military tax. This also includes income from renting apartments. Taxation in this situation is based on the results of the annual declaration, ie the person determines the amount of tax liability in the annual return.
It should be noted that the real estate market is quite in the shadows, which is the subject of discussion at the government and parliament levels. Because of this, they plan to amend the legislation. In particular, one of the areas of reform is the creation of an electronic system of accounting for apartments for rent, and the contract is proposed to be concluded through “ACTION“ or a notary.
At the same time, taxpayers already have several proven ways to install such taxable objects.
◉ Life circumstances
Any situation that brings a case or lease information to court, the police, or a precinct may be the basis for a tax liability.
For example, if the owner is sure that the tenant in the apartment has damaged or stolen something on departure; the situation with the flooding of the apartment and the identification of the culprit will also establish the fact of renting the property.
◉ Regular payments
Banking institutions have increasingly begun to conduct financial monitoring and analyze regular payments to citizens’ accounts. If a fixed amount from one sender falls on your account once a month, this raises unnecessary questions. Of course, this is protected by bank secrecy, but each rule has exceptions.
◉ Several apartments
In such inspections, the tax office uses data from the State Register of Real Property Rights and the Customs Service Register to understand which apartments a citizen owns and where he lives, and where other citizens live.
◉ Rent an apartment for the organization
If you rented an apartment to the organization, then when you check it can reach you.
The fact of delivery will be revealed when studying the company’s contracts – it will indicate for which apartment the bookkeeping transferred money to you. In addition, you should also understand that the legal entity in this case acts as a tax agent for you and is obliged to withhold and pay the tax.
◉ Complaint from others
Anyone can complain to the tax office that a citizen rents an apartment and does not pay taxes, but more often it is neighbors and tenants. Neighbors may be dissatisfied with both your tenants and complain about the harmfulness – the fact that you earn in your apartment can be unsettling.
Therefore, the issue of real estate lease is quite complex and important, so contact the law firm «Prikhodko & Partners» – we will be happy to help you.
Author: Tatiana Kravchenko
lawyer of the real estate and construction department
«Prikhodko & Partners» Law Firm