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Are social contributions deducted from income earned from renting out real estate?
Are social contributions deducted from income earned from renting out real estate?
Should mandatory state social insurance (MSSI) and compulsory health insurance (CHI) contributions be calculated on income earned by an individual from renting out personally owned real estate?
According to the State Tax Service under the Ministry of Economy, pursuant to Article 99.3 of the Tax Code, income derived by an individual from leasing their own property is considered non-entrepreneurial income. Individuals must register with the tax authorities, obtain a TIN, and calculate income tax at a rate of 14% under Article 101.2 of the Tax Code. The income tax return must be submitted and paid no later than March 31 of the following year.
Under Article 15 of the Law of the Republic of Azerbaijan “On Social Insurance”, mandatory state social insurance contributions are not calculated on income that is unrelated to employment or entrepreneurial activity.
Furthermore, under Article 15-2.2.2 of the Law “On Medical Insurance”, compulsory health insurance obligations apply to individuals engaged in entrepreneurial and other taxable activities.
Therefore, the legislation does not require the payment of compulsory health insurance contributions on income earned from renting out real estate.
Legal basis: Article 99.3 of the Tax Code, the Law “On Social Insurance”, and the Law “On Medical Insurance”.
Should mandatory state social insurance (MSSI) and compulsory health insurance (CHI) contributions be calculated on income earned by an individual from renting out personally owned real estate?
According to the State Tax Service under the Ministry of Economy, pursuant to Article 99.3 of the Tax Code, income derived by an individual from leasing their own property is considered non-entrepreneurial income. Individuals must register with the tax authorities, obtain a TIN, and calculate income tax at a rate of 14% under Article 101.2 of the Tax Code. The income tax return must be submitted and paid no later than March 31 of the following year.
Under Article 15 of the Law of the Republic of Azerbaijan “On Social Insurance”, mandatory state social insurance contributions are not calculated on income that is unrelated to employment or entrepreneurial activity.
Furthermore, under Article 15-2.2.2 of the Law “On Medical Insurance”, compulsory health insurance obligations apply to individuals engaged in entrepreneurial and other taxable activities.
Therefore, the legislation does not require the payment of compulsory health insurance contributions on income earned from renting out real estate.
Legal basis: Article 99.3 of the Tax Code, the Law “On Social Insurance”, and the Law “On Medical Insurance”.