Tax Service of Sevastopol: how profitable to rent out housing during the holiday season?

CrimeaPRESS reports:

Many Sevastopol residents in the summer carry out activities to provide rental housing for vacationers. How are these incomes taxed? What is the best way to choose? We will try to answer these questions in our publication. The current legislation, according to the press service of the Federal Tax Service of Russia in Sevastopol, allows you to choose the method of taxation at will, based on the conditions of doing business and the purpose of the premises. You can pay taxes in 3 ways:

• as an individual, with the payment of personal income tax;
• as a person applying a special tax regime for self-employed citizens — «Tax on professional income»;
• as an individual entrepreneur.

The choice depends on many factors: the regularity of income received, the status of housing (residential / non-residential), the use of labor of employees, etc.

Option 1: Payment of personal income tax.

This option is suitable if residential property is not rented out on a regular basis, rental income is unstable (seasonal). The tax rate is % of the income received. At the end of the year, the homeowner reports his income: fills out a 3-NDFL declaration and submits it to the tax service.

If a citizen rents an apartment constantly and regularly posts ads for daily or long-term rent, then this is already receiving income on a systematic basis. In this case, an individual is registered either as an individual entrepreneur or as a professional income tax payer.

Option 2: Special tax regime for self-employed citizens — “Tax on professional income”.

In this case, the landlord registers online in the application «My tax». The tax rate is 4% for settlements with individuals or 6% for settlements with legal entities. The tax is calculated automatically through the My Tax application based on the generated checks for the service. It is necessary to pay the tax before date following the results of the previous month. However, this method can only be used when renting residential real estate. You can provide office space or apartments for rent only in the status of an entrepreneur.

It should be noted that, having registered “self-employment”, you can simultaneously work in any company and even in the public service.

Option 3: Paying tax as an individual entrepreneur.

With this method of payment, it is necessary to register as an individual entrepreneur with the tax authorities. In this case, the following tax rates apply:

• General taxation system — % (in this case, you can take into account the amount of expenses for doing business if they are documented);
• Simplified taxation system (in Sevastopol — 4% (income), 10% (income-expenses);
• Patent system of taxation (by type of activity : the cost can be calculated on the official website of the Federal Tax Service using the service «Tax calculator — Calculation of the cost of a patent»).

The service of the Federal Tax Service of Russia «Create your business» will help you choose the taxation regime.

In addition, an individual entrepreneur has the opportunity to use hired labor. When registering a business, you can rent not only residential real estate, but also non-residential commercial premises. As well as to conduct activities for the provision of services in hotels and apartments.

In short, the choice is yours! If you still have questions, you can clarify them through the “Taxpayer’s Personal Account” or the “Contact the Federal Tax Service” service, as well as contact the tax service of Sevastopol with a question personally at the following addresses: st. Heroes of Sevastopol, 13; st. Proletarian, 24; st. Kulakova, 37.

Source: press service of the Federal Tax Service of Russia in Sevastopol 7737