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Renter to Pay 20% Income Tax

March 18, 2011

Renters will have to pay 20% income tax. The head of Services Department of Revenue Service Vasil Gedevanishvili states that notwithstanding the cost of the rent, renter is obliged to pay income tax any ways.

“According to the new Tax Code if a legal entity rents a place from the physical entity, then the legal entity is obliged to pay the tax from the rent money. According to the old Code, the legal entity fully paid the rent money and then the renter paid the tax.”

As for the renting between the physical entities, the issue of payment of 20% income tax is a matter of agreement between the renter and tenant. In this case, there is no limit for the income tax. No matter what is the cost of the rent, tenant (according to the agreement) is obliged to pay income tax,” – stated Vasil Gedevanishvili.

In this case Revenue Service will have to conduct strict administration to reveal the fact of renting between the physical entities.

The head of Services Department of Revenue Service Vasil Gedevanishvili states that it is no problem for tax department to search such information.

“There are different procedures for obtaining information. Regarding physical entities, obtaining information is a little harder. However, if the information is provided on the fact of renting, they will have to pay income tax,”- states Gedevanishvili.

If the Revenue Service reveals the fact of violation, then the individual will have to fully cover the hidden taxes plus fines.

GHN

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