Tax payers clearing private leases for 2022 they still have alternative means of accounting – general rules and lump sums. This was the last year in which private rental revenues could be taxed on general terms. Revenue from private rental from 2023 may be taxed only on a flat-rate basis. It is worth noting that these situations concern rental contracts concluded by natural persons, but not in the context of economic activity.
General rent settlement
Where the taxable person has made advances in 2022 on a general basis, make annual accounts in print PIT-36. It may include, inter alia, a tax-free amount (from 2022 is 30,000 PLN) and any other costs incurred in connection with the lease of the apartment, for example renovation, improvement, interest on the mortgage.
Act Polish Deal 2.0[1] valid from 1 July 2022 introduced a new tax rate on a general basis. Consequently, the rent income will be taxed at the rate 12% where it does not exceed the threshold 120,000 PLN and 32% above the amount 120,000 PLN.
An additional possibility created for taxpayers is the one-off possibility of changing the tax treatment of rental income. Well, when the taxpayer paid the income tax advance by calculating it as a flat-rate income, it could make a change and settle it on a general basis.
The possibility of changing settlements is possible only from a flat-rate to taxation on a general basis. The option was created by reducing the tax rate on a general basis during the tax year, and therefore, as part of the tax compensation, taxpayers can choose how to tax.
This should be notified to the tax office by submitting an annual declaration PIT-36.
Flat-rate settlement
Taxable persons who accounted for private rent in a lump sum during the 2022, When paying monthly or quarterly advance payments, they will also have a small change in settlement. Namely, tax changes Polish Deal harmonised the time period for submission of annual accounts. PIT-28 where the lump sum is chosen, to be paid to 2 May 2023.
It is worth pointing out that there are no deductions and no tax-free amounts available. The amount of tax is therefore dependent on the amount of income received by the taxpayer during the year. The tax rate is 8.5% for an amount of revenue not exceeding 100,000 PLN a for larger amounts 12.5% above 100,000 PLN.
For example, if the taxpayer has received one year 110,000 PLN revenue, the tax to be paid will be:
(100,000 x 8.5) + (10,000 x 12.5%) = 8500 + 1250 = 9,750 PLN
9,750 PLN tax payable for rent income. The time limit for settlement, as mentioned earlier, is 2 May 2023. It is worth pointing out, of course, that the taxpayer does not have to wait until the last day and the tax offices accept declarations from 15 February 2023.
Private rental in 2023
Tax payers who rent an apartment privately, i.e. not within the framework of their business activity, will be able to settle the tax solely on the basis of a lump sum. As already described, the basis of the flat-rate tax is income (i.e.
everything we get as payment), not income (the income is the amount after deduction from the revenue of the cost of obtaining them). Besides, we no longer have the possibility to benefit from the tax-free amount. What is to be remembered when concluding a lease agreement with a tenant?
Very often there are situations where the tenant does not have confidence or I want to have control of the state of charges towards the cooperative, so the contract sets the amount for both the owner of the apartment and the rent due to the cooperative.
From 2023 Such a contractual arrangement will lead to an increase in the tenant's tax base as costs cannot be deducted.
In order to eliminate the increased amount of tax, the contract should be clearly distributed, which consists of the rent for the property owner and which constitutes the amount of advance payments for the so-called media.
Of course, it would be best to explicitly oblige the landlord to pay all the media himself, or even to transfer the contracts of energy suppliers, etc. Also remember to pay timely advances on income tax to twenty the day of the month following the month of receipt of payment.
The transfer must be made to the taxpayer's personal micro account, which can be generated on the website of the tax office by entering its PESEL number. Non-payment of advances threatens to penalise us and to pay interest on late payments.
Liability follows the provisions of the Tax Penal Code[2] for an offence, or fiscal criminal offence depending on the amount not paid.
[1] Act dated 9 June 2022 amending the Income Tax Act on individuals and certain other laws, Journal of Laws of 2022, item 1265.
[2] Act dated 10 September 1999 Tax Penal Code (i.e. Journal of Laws of 2022, item 859 as amended)
Author: Darya Bannaya
Tax consultant in Russell Bedford Poland. Graduate of Law at the Faculty of Law and Administration at the University of Warsaw, graduate of Global Business, Finance and Management at Warsaw School of Economics. Winner of the Ministry of Finance competition “Tax of Leaders” 7. edition.
Conducting trainings and conferences for foreigners in tax aspects of conducting and establishing business in Poland. He specializes in tax law, advising clients on current matters relating primarily to income taxes. From 2021 Specializes in transfer pricing.
Together with an experienced team, he supports leading companies in fulfilling tax obligations in terms of transfer prices. Author and co-author of a tax law publication.