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Tenancy agreement registration at the SRS applying the rate of 10%

Corvin Real Estate hereby reminds that in 2018 rental or lease of an immovable property for a compensation classifies as an economic activity and, therefore, personal income tax (PIT) must be paid from the revenues.

To ease your economic activities, no economic operations for now have to be registered with the State Revenue Service (SRS), but instead owners of immovable properties are allowed to lodge with the SRS a copy of an agreement entered into with the tenant. A copy of the agreement must be lodged within 5 business days following signing the respective agreement.

Upon registration of the agreement with the SRS, the PIT of the owner of the immovable property will be calculated at the rate of 10% of the gained income. Upon registering the agreement by using the aforementioned fixed rate, only immovable property tax may be deducted from the revenue gained. In such a case, no other expenses may be deducted.

If an immovable property is rented to a legal person and the agreement is registered with the SRS to apply the rate of 10%, the lease holder must deduct from the tenancy price 10% and transfer the amount into the State budget.

An annual income declaration regarding the rent or lease of an immovable property must be lodged with the SRS once a year from 1st March to 1st June covering the previous year, and the tax must be paid by the Renter within 15 days following the day of submission of the annual income declaration.

The tenancy or lease agreement as well as the annual income declaration may be lodged with the SRS at any SRS Client Service Centre in person or via the Electronic Declaration System (EDS).

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