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What tax liability does an enterprise that leases a vehicle incur?
What tax liability does an enterprise that leases a vehicle incur?
I want to lease my own vehicle to an enterprise. I am not a taxpayer, I will drive the car myself during the lease period, but I am not an employee of the company. In this case, what tax liability will the company have - will it pay tax only at the source of payment in accordance with the lease amount, or will it have an additional tax liability because I drive the car myself?
The State Tax Service under the Ministry of Economy reported that when the lease fee is paid to an individual by persons registered as taxpayers, the tax liability on income from the lease is fulfilled at the source of payment (at a rate of 14 percent) by the lessee. If the income of an individual is only from the lease, there is no obligation to be registered for tax purposes and submit a declaration in this regard.
If the person paying the rent is not registered as a taxpayer, the individual who is the lessor must be registered as a taxpayer with the tax authority (receive a TIN) and calculate tax at a rate of 14 percent on the income obtained from this activity, submit the “Income Tax Declaration” to the tax authority no later than March 31 of the year following the reporting year, and pay the amount of income tax calculated during that period to the state budget. In the case specified in the request, income tax at a rate of 14 percent must be withheld from the amount specified in the lease agreement, and the remaining funds must be paid to the lessor.
At the same time, according to paragraph 12 of Article 15 of the Law “On Social Insurance”, mandatory state social insurance contributions are not calculated on income not related to hired work and entrepreneurial activity (interest income, dividends, income from renting property, royalties, income from the provision of assets not used for entrepreneurial purposes, the amount of gifts and inheritances, winnings in the form of money from betting games related to sports games, lotteries, as well as other competitions and contests).
Regarding the second question , we would like to inform you that if a person is involved in the performance of work (services) related to the employer's main field of activity, if the composition of the payment for the service provided consists of the monthly tariff (position) salary, allowances and bonuses specified in Part 3 of Article 157 of the Labor Code, an employment contract is mandatory. In this case, Article 58.10 of the Tax Code applies. According to that article, since the employer creates conditions for concealing (reducing) the income of individuals by involving them in the performance of any work (services) without the employment contract entering into legal force in accordance with the procedure provided for in the Labor Code, a financial sanction of 2,000 manats is imposed on each such person for the first time, 4,000 manats for the second time, and 6,000 manats for three or more times during a calendar year.
Additionally, according to Article 192.1 of the Code of Administrative Offenses, individuals are fined from 1,000 to 2,000 manats, officials from 3,000 to 5,000 manats, and legal entities from 20,000 to 25,000 manats for engaging individuals in the performance of any work (services) by the employer before the employment contract enters into legal force in accordance with the procedure provided for in the Labor Code.
I want to lease my own vehicle to an enterprise. I am not a taxpayer, I will drive the car myself during the lease period, but I am not an employee of the company. In this case, what tax liability will the company have - will it pay tax only at the source of payment in accordance with the lease amount, or will it have an additional tax liability because I drive the car myself?
The State Tax Service under the Ministry of Economy reported that when the lease fee is paid to an individual by persons registered as taxpayers, the tax liability on income from the lease is fulfilled at the source of payment (at a rate of 14 percent) by the lessee. If the income of an individual is only from the lease, there is no obligation to be registered for tax purposes and submit a declaration in this regard.
If the person paying the rent is not registered as a taxpayer, the individual who is the lessor must be registered as a taxpayer with the tax authority (receive a TIN) and calculate tax at a rate of 14 percent on the income obtained from this activity, submit the “Income Tax Declaration” to the tax authority no later than March 31 of the year following the reporting year, and pay the amount of income tax calculated during that period to the state budget. In the case specified in the request, income tax at a rate of 14 percent must be withheld from the amount specified in the lease agreement, and the remaining funds must be paid to the lessor.
At the same time, according to paragraph 12 of Article 15 of the Law “On Social Insurance”, mandatory state social insurance contributions are not calculated on income not related to hired work and entrepreneurial activity (interest income, dividends, income from renting property, royalties, income from the provision of assets not used for entrepreneurial purposes, the amount of gifts and inheritances, winnings in the form of money from betting games related to sports games, lotteries, as well as other competitions and contests).
Regarding the second question , we would like to inform you that if a person is involved in the performance of work (services) related to the employer's main field of activity, if the composition of the payment for the service provided consists of the monthly tariff (position) salary, allowances and bonuses specified in Part 3 of Article 157 of the Labor Code, an employment contract is mandatory. In this case, Article 58.10 of the Tax Code applies. According to that article, since the employer creates conditions for concealing (reducing) the income of individuals by involving them in the performance of any work (services) without the employment contract entering into legal force in accordance with the procedure provided for in the Labor Code, a financial sanction of 2,000 manats is imposed on each such person for the first time, 4,000 manats for the second time, and 6,000 manats for three or more times during a calendar year.
Additionally, according to Article 192.1 of the Code of Administrative Offenses, individuals are fined from 1,000 to 2,000 manats, officials from 3,000 to 5,000 manats, and legal entities from 20,000 to 25,000 manats for engaging individuals in the performance of any work (services) by the employer before the employment contract enters into legal force in accordance with the procedure provided for in the Labor Code.