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Taxation rules for income derived from renting out residential properties
Taxation rules for income derived from renting out residential properties
According to Article 124.1 of the Tax Code, income derived from renting out residential premises owned by individuals (except for hotels and accommodation facilities located in hotel-type establishments) is subject to withholding tax at a rate of 10 percent at the source of payment. Individuals registered with the tax authorities who make such payments are obliged to withhold this tax at the source. The person responsible for withholding tax from the rental payment must transfer the tax to the state budget no later than the 20th day of the month following the quarter in which the income was paid and submit the relevant withholding tax return to the tax authority.
If the person paying the rent is not registered as a taxpayer, the individual renting out the property or their appointed tax agent must register with the tax authority (obtain a TIN) and calculate a 10 percent tax on the income earned from this activity. No later than March 31 of the year following the reporting year, a personal income tax return must be submitted to the tax authority, and the calculated tax must be paid to the state budget.
In response to your inquiry, we inform you that the tax liability on income derived from renting out real estate is applied to the rental amount specified in the agreement between the parties. If the rental amount stated in the contract is 600 manats, the tax is calculated directly on that amount.
Basis: Articles 124 and 150.1.6 of the Tax Code.
According to Article 124.1 of the Tax Code, income derived from renting out residential premises owned by individuals (except for hotels and accommodation facilities located in hotel-type establishments) is subject to withholding tax at a rate of 10 percent at the source of payment. Individuals registered with the tax authorities who make such payments are obliged to withhold this tax at the source. The person responsible for withholding tax from the rental payment must transfer the tax to the state budget no later than the 20th day of the month following the quarter in which the income was paid and submit the relevant withholding tax return to the tax authority.
If the person paying the rent is not registered as a taxpayer, the individual renting out the property or their appointed tax agent must register with the tax authority (obtain a TIN) and calculate a 10 percent tax on the income earned from this activity. No later than March 31 of the year following the reporting year, a personal income tax return must be submitted to the tax authority, and the calculated tax must be paid to the state budget.
In response to your inquiry, we inform you that the tax liability on income derived from renting out real estate is applied to the rental amount specified in the agreement between the parties. If the rental amount stated in the contract is 600 manats, the tax is calculated directly on that amount.
Basis: Articles 124 and 150.1.6 of the Tax Code.