Economic activity based at home is a very popular solution, especially among small entrepreneurs. Renting commercial space is expensive and not everyone can afford such convenience. In this case, the business-saving solution is not as comfortable as the tax side. Unpleasant surprises await not only entrepreneurs, but also those who decided to rent them an apartment.
The tax system should not only provide revenue to the state budget. Transparency and the avoidance of questionable social justice solutions are also important.
An entrepreneur who drags the landlord into a trap
Individuals who obtain income from renting an apartment may apply a very favourable flat-rate tax rate of 8.5% He's here, though. one „but’. This privilege is not available if the property is rented for business purposes. Then the tax rate increases at least to 18%
What then determines the low rate of ordinary rental or high rate of economic rental? Nothing seems to cause concern – entry in Central Register and Information on Economic Activity (CEIDG). In this register, the entrepreneur shall indicate the address of his place of business. Of course, this address can be changed, and by doing so, you can surprise someone.
Let us illustrate this with a simple example. A small entrepreneur hires a condo. The owner pays a tax of 8.5% The entrepreneur then changes CEIDG. Enters a new address for the business premises, which is transferred to the studio. After this operation, the owner loses his right to a lower tax rate also when he does not know anything.
Is this construction fair?
There's a lot of doubt. The result is that someone has to pay a higher tax because someone else has decided that, and in everything there is a hint of deception. It would be difficult to expect the owner of the apartment to check every day at CEIDG if his property did not become the official seat of someone's company. There's a risk that we're dealing with a loophole in the law. Protection regulations are missing landlord.
Property tax against company at home
A single-family house may seem an ideal place for a business establishment for a beginner. Destiny one The room on the home office or workshop is much simpler than looking for real estate for rent. Unfortunately, we will not avoid a higher contribution to the state in this case.
Maximum rate of property tax for 1 m2 This 0.77 PLN for residential buildings and 23.1 PLN for business-related buildings. The difference is thirty times.
If we want to contribute to the development of the economy, we should strive to avoid unnecessary obstruction of taxpayers' lives. The described structures related to properties in small enterprise are probably not the best possible.
Source: https://www.forbes.pl/biznes/wynajem-mieszkania-a-dzialalnosc-gospodarcza-jaki-podatek/78g391j
Author:
Andrzej Dmowski
Managing Partner Russell Bedford, Doctor of Legal Sciences, Lawyer, Tax Advisor, Restructuring Advisor, Certified Public Accountant – Expert Auditor in Ireland, Certified Fraud Examiner - Expert on Crime Detection and Economic Abuse, Certified Internal Controls Auditor - International Internal Auditor.
Graduate of the University of Cambridge - British Centre for English and European Legal Studies - Faculty of Law and Administration, Graduate and Fellow of the Faculty of Law and Administration of the University of Warsaw.
Specializes in settlement of transactions between related entities - transfer pricing, legal and tax aspects of M&A and issues concerning derivatives of financial instruments.