How to account for rental income?
In the PIT Act, among the sources of income, lease, sublet, lease, sublet and other contracts of a similar nature are distinguished. Therefore, a taxpayer deciding to rent part or all of his premises should remember that such income should be shown and accounted for in terms of income tax.
Rental income - what tax?
The adventure with renting should begin with the decision what form of taxation to choose. When deciding on the tax scale - 18% or 32% tax depending on the amount of income - you do not have to report your choice to the tax office. If, on the other hand, the taxpayer prefers to settle the lump sum on recorded revenues, his duty is to submit a written declaration to the head of the competent tax office. In such a case, it is important to remember about the deadlines - the choice of the lump sum should be reported by the 20th day of the month after the month in which the first rental income was obtained, or by January 20 of the new tax year.
Documenting the lease
Rental income does not have to be documented with special records. However, it is important that the taxpayer has evidence - e.g. in the form of contracts or invoices, when the premises are rented as part of business activities. In addition, it is also important to have evidence documenting the costs - gas, electricity, etc.
The tax base
When settling accounts with the tax office for rental income, the taxpayer who chose the tax scale takes into account the income. Thus, the direct income received from the tenant should be reduced by the costs. An example of such costs may be, for example, expenses incurred for the ongoing repair and operation of an apartment.
However, if the tax is settled on the basis of a recorded lump sum, the taxpayer takes into account only income. Tax-deductible costs are not important here.
As for the media, whether or not they will enter the tax base depends on specific provisions in the lease agreement. Income is everything that constitutes payment - so if utilities are part of the rental service provided, they will be added to the tax base. Start a free 30-day trial period with no strings attached!
How is the rental income accounted for?
During the tax year, the taxpayer should remember to make advance payments for income tax. The obligation to pay such a fee will arise for the first time in the month in which the income calculated cumulatively from the beginning of the year exceeds the amount that causes the obligation to pay the tax. Therefore, for taxpayers settling on the principles of the tax scale - 18% or 32% depending on the amount of income - the first advance payment will have to be made when the income rounded to full zlotys exceeds the amount of PLN 3,092. As for the lump sum, the tax rate appropriate for the tax is 8.5% (or 12.5% - applicable from 2018 if the revenues exceed PLN 100,000 in a given year). The obligation to pay the tax - and hence to pay the advance payment - will arise when the income exceeds PLN 6.
Withdrawal of advance payments for rental tax does not differ from advance payments from other income - the amount due should be paid by the 20th day of the month for the previous month.
The taxpayer is required to report the rental income in the annual declaration. If they were taxed on the basis of a scale, you should use the PIT-36 declaration, on which you can simultaneously show income from work, business activity, etc. The deadline for submitting such a declaration is 30 April.
On the other hand, income taxed on the basis of a lump sum should be accounted for on the PIT-28 declaration. The deadline for submitting this document is January 31.