Lump sum taxed private rental and deduction of health insurance contribution


Renting the premises outside of the conducted business activity

People who run a business can simultaneously rent a private apartment and tax it with a registered lump sum. The choice of this form of taxation is not limited by the form chosen for the purposes of the conducted activity. Thus, the entrepreneur may settle the activity according to general principles, and the private rental may be settled with the registered lump sum. However, is the entrepreneur entitled to deduct the health insurance premium from private rental revenues?

Health insurance contributions affect the amount of tax

According to the regulations currently in force, health insurance contributions may be deducted from the tax that a given entity is obliged to pay to the tax office. The condition is that these contributions have actually been paid. The deduction, however, is not due in full to the amount of health insurance in which the health insurance has been transferred to ZUS, but only in a statutorily defined part, namely 7.75% of the calculation basis for health insurance.

If an entrepreneur running a business makes a loss from this activity, or the amount of tax payable is lower than the deductible health insurance premiums paid by the entrepreneur in a given year, he has the right to include the paid insurance in the settlement of private rental income. So it does not matter what source of income the paid health insurance premiums relate to. It is important that they are paid in a given tax year and properly documented. If these conditions are met, the entrepreneur will be able to reduce the tax payable in the annual settlement of private rental revenues by the part that has not been included in the settlement of business activities, and which gives him the right to reduce the amount of tax due.

The regulations currently in force provide the right for insurance premiums not covered by tax on business income to be deducted from tax due on other income (e.g. from lump-sum rental).