Taxes while renting out real properties Printable versionLast update: 31.03.2021
It is known that the business related to real estate, is one of the most profitable. Special "attraction" is made by transactions connected with rental real estate. However, not all participants of these transactions are familiar with the principles of taxation when renting real estate objects.
If you decide to sell immovable property and/or a vehicle do you need to pay tax?
If you sell a property and/or a vehicle that is on the property right more than 1 year from the date of registration of the property right, no property income arises, accordingly the presentation of a declaration on individual income tax is not required.
But, if you sell a property and/or a vehicle that is under ownership less than 1 year from the date of registration of the property right, a property income arises that is determined as a positive difference between the cost of selling the apartment and the cost of its acquisition. If such an income arises, you must submit a personal income tax return (form 240.00) no later than March 31 of the year following the year in which such income was received and pay an individual income tax of 10% of such income no later than April 10 of the year following the year in which such an income was received.
It’s not necessary to be IE to lease real estate
First of all you should note that to lease out real estate is available as forindividuals, including those who are without registerion as an individual entrepreneur, so for legal entities. Registration form – IE by the patent, IE by the simplified declaration or legal entity – affect on the amount of tax which is subject to payment.
Let’s consider the first case, when real estate is leased by the physical person not registered as individual entrepreneur.
Under the article 27 of RK Law "On private entrepreneurship" state registration of individuals engaged in private entrepreneurship without legal personality considers the registration as an individual entrepreneur in the territorial tax authority at the place of location. The law also clarifies that the physical person who does not employ workers on a permanent basis has the right not to register as an individual entrepreneur while obtaining of property income.
In accordance with Article 35 of the Business Code of the Republic of Kazakhstan, the state registration of individuals engaged in private business without the formation of a legal entity is to be registered as an individual entrepreneur in the state revenue body at the location declared as an individual entrepreneur under state registration.
In its turn, income received from the lease out the property refers to property income of physical person. Tax amount comprises 10% from income amount. The main thing in this case, pay the tax on time within 10 working days after the deadline set for the submission of declaration on individual income tax, i.e on the 31st of March next year.
In what cases is it obligatory to register as IE?
If legal entity is a landlord or tenant
Responsibility for mom-payment of taxes