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The bill for apartment owners caught not paying taxes runs into millions
Renting out an apartment as a way to make money , it seems, may not be a “job” for the faint of heart. Tax officials have identified 2.5 million Russians who had an obligation to pay income tax for renting out real estate last year, but did not file a declaration. As fiscal officials remind, even those who have filed a declaration should not relax. It’s not enough to file a declaration; you still have to pay the declaration tax by July 15th.In fiscal language , the hunt for apartment owners who rent out housing but do not pay taxes is called “additional involvement of individuals in declaring.” According to preliminary results announced by the Federal Tax Service, the result of this action is as follows: 2.5 million people, with the help of local police officers and Rosregistration officials, were taken into account by the tax service - these are those who were convicted of concealing taxes related to taxes from the state. selling real estate or renting it out. Of these, almost 600 thousand people have already been required to declare and have paid almost 2 billion rubles to the treasury. This increased tax collection by as much as 204%. As tax officials especially emphasize, in the five months of this year, significantly more citizens were involved in declarations than in the entire last year.
Failure to submit a declaration for income received from renting out an apartment entails a fine of 5% of the amount of tax payable for each month. A six-month delay in filing a return is fraught with a fine of 30% of the tax amount plus 10% for each subsequent month. Incomplete payment of tax is subject to a 20% fine, and intentional failure to pay is punishable by a fine of 40% of the arrears.
The Federal Tax Service has been talking about intensifying work to identify income tax evaders among those renting housing for two years now. In September 2005, tax officials issued an explanation on how to pay income tax to citizens who rent out their own real estate. As follows from the explanation, the only way to avoid explanations with the fiscal authorities regarding the payment of 13 percent income tax for someone who rented out an apartment but did not register as an entrepreneur is to rent out the property to a private entrepreneur or legal entity. In this case, the tax agent, that is, the tenant, is responsible for calculating and paying the tax. Therefore, if the process is properly organized, from a tax point of view, it is sometimes more profitable to rent out apartments through serious intermediary companies that lease real estate and then sublease it.
If the apartment is rented directly to an individual, the owner will have to take care of paying the tax himself. If renting out an apartment is systematic, such activity can be equated to individual entrepreneurship. If you take the time to register as an entrepreneur without forming a legal entity, you can significantly minimize your tax expenses by switching to a simplified taxation system and paying 6% of income plus 150 rubles according to this system. per month fixed payment to the Pension Fund. At the same time, when calculating income, expenses for apartment renovation, utility bills, advertising, including the services of a realtor in finding tenants will be taken into account. It is also important that property leased for business purposes is exempt from property tax.
Another legal opportunity to pay the state when renting out an apartment was the payment of a single tax on imputed income (UTII). But only if in the region, by decision of local authorities, this activity is transferred to UTII.
Since 2008, an expanded list of activities that (by decision of local authorities) can be transferred to this tax should come into force. This list, in particular, includes the provision of services for the rental of residential premises. But “imputation” will be more relevant for those who rent out housing in large quantities, for example in resort areas.
In 2006, another clarification followed, but this time from the Ministry of Finance, which refused to consider the rental of apartments as a business. The Civil Code connects the need to register an individual as an individual entrepreneur with the implementation of a special type of activity, and not just with the completion of paid transactions, the financial department reminded the tax authorities. Therefore, citizens cannot be fined for illegal business, but only for non-payment of taxes.
Considering that all the nuances of the correct delivery of apartments to citizens were explained, the Federal Tax Service decided to launch an active campaign to find defaulting apartment owners. As it became known immediately after the appointment of Mikhail Mokretsov as head of the Federal Tax Service, the tax service began to introduce new options for monitoring “apartment” income, paying special attention to the latter during the declaration campaign. The Federal Tax Service decided to identify tax evaders among the owners of rental apartments both through departmental channels - through the Ministry of Internal Affairs and Rosregistration, and through unofficial channels, in particular through neighbors. Moreover, the tax authorities expect both those who rent out the apartment and those who rent it to file claims. The logic is that if a stranger lives in an apartment for free, then he actually receives income without paying rent. The current declaration campaign has not yet reached such extremes, but local fiscal officials have actually begun active work with local police officers looking for a variety of migrants on their territory.
The problem, however, is that even for someone who wants to pay taxes on a rented apartment and sleep peacefully, it is technically quite difficult to do this. To pay income tax, you still need to remit it correctly. And having paid once, you are “on the hook” to the inspector, and in order to confirm that the apartment is not for rent and does not generate income, you will have to submit an agreement to terminate the contract to the inspector. So the easiest way to make money on extra square meters turns into the most dangerous.