Very good information for entrepreneurs and people who make money from renting real estate. The Ministry of Finance introduced the rules of taxation of certain income from economic activity.
A significant change lies in the possibility of taxing with a flat rate (i.e. 8.5% and 12.5% over PLN 100,000) income from rental as part of business activity, and not only taxpayers who rent their real estate privately.
Rent - as of 2020
Private rental can be settled according to the tax scale (17% and 32% of income), i.e. general rules and a lump sum (8.5% of the revenue up to the amount of PLN 100,000 and 12.5% of the surplus over PLN 100,000).
The advantage of the lump sum is simple settlements, the disadvantage - the inability to deduct costs and use the tax-free amount.
Rent in the business scheme
Persons running sole proprietorships in the field of apartment rental may tax the income obtained in this way according to the tax scale (17% - income not exceeding the first tax threshold, 32% - the second tax threshold relating to income above PLN 85,528) or with a flat tax (19% regardless of the amount of income obtained).
Important! In 2020, income from the rental of flats qualified as income from business activity may not be taxed with a lump sum on recorded income, this preferential form of taxation is possible only for the rental of private real estate.
Rent - as of 2021
On the basis of the act on amending the act on personal income tax published on November 30, 2020, the act on corporate income tax, the act on flat-rate income tax on certain revenues earned by natural persons and some other acts - from 2021 a lump sum according to two rates (8.5% and 12.5% on the excess of revenues over PLN 100,000), will be taxed on most of the revenues related to rental and accommodation.
According to the amended art. 12 sec. 1 point 3 of the flat rate tax act, the rate of 8.5% and 12.5% can be used for:
- Revenues from the so-called private rent
- The revenues referred to in art. 14 par.. 2 point 11 of the PIT Act, i.e. revenues from rental, subrental, rental and other contracts of a similar nature, assets related to business activity, which revenues are also included in revenues from economic activities.
- Providing accommodation services (PKWiU division 55)
- Provision of rental and servicing services for own or rent real estate (PKWiU 68.20.1)
Apart from the above-mentioned change, i.e. introducing from 2021 the possibility of lump-sum taxation (i.e. the rate of 8.5% and 12.5% over PLN 100,000) of rental income as part of business activity, other forms of taxation of rental income remain unchanged in relation to 2020.
PwC Comment
In our opinion, the choice of the form of taxation of rent should be preceded by a thorough analysis.
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