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Can an agent fulfill the tax obligation on rental income of individuals?
Can an agent fulfill the tax obligation on rental income of individuals?
Through the platform implemented by “XX” LLC, real estate owned by third parties is listed on the platform, and thereafter, intermediary (agent) services are provided to individuals who apply via the platform for daily or monthly rental services (no sublease activity is carried out). Payments are processed through the company. The platform is expected to have thousands of property owners as users. In this case, can the company fulfill the tax obligation arising when making rental income payments to individuals?
According to the State Tax Service under the Ministry of Economy, pursuant to the provisions of Article 124.1 of the Tax Code, a tax at the rate of 14% is withheld at the source of payment from rental fees for movable and immovable property. Starting from January 1, 2025, under the amendments made to the said article of the Tax Code, if the rental fee is paid by an individual who is not registered as a taxpayer, the lessor, either personally or through a tax agent appointed by them, shall pay the tax at the rate of 14% in accordance with this article, register for tax purposes, and submit a tax return under Articles 33 and 149 of this Code.
Accordingly, if the rental fee is paid by individuals who are not registered as taxpayers and the company is appointed as an agent by the lessor individuals, the company shall withhold and declare the 14% tax on such individuals’ rental income.
Through the platform implemented by “XX” LLC, real estate owned by third parties is listed on the platform, and thereafter, intermediary (agent) services are provided to individuals who apply via the platform for daily or monthly rental services (no sublease activity is carried out). Payments are processed through the company. The platform is expected to have thousands of property owners as users. In this case, can the company fulfill the tax obligation arising when making rental income payments to individuals?
According to the State Tax Service under the Ministry of Economy, pursuant to the provisions of Article 124.1 of the Tax Code, a tax at the rate of 14% is withheld at the source of payment from rental fees for movable and immovable property. Starting from January 1, 2025, under the amendments made to the said article of the Tax Code, if the rental fee is paid by an individual who is not registered as a taxpayer, the lessor, either personally or through a tax agent appointed by them, shall pay the tax at the rate of 14% in accordance with this article, register for tax purposes, and submit a tax return under Articles 33 and 149 of this Code.
Accordingly, if the rental fee is paid by individuals who are not registered as taxpayers and the company is appointed as an agent by the lessor individuals, the company shall withhold and declare the 14% tax on such individuals’ rental income.