Reduced Tax on Rent
The Government has launched a new withholding tax on rent, whereby the rate of tax on income from rented properties would be reduced from a maximum of 35% to 15%, tax evasion will be discouraged, and government revenue will increase.
The 15% tax rate would be applicable to rented properties for residential purposes, including garages. Both individuals and companies are eligible for this new reduced tax rate, which is applicable on rental income earned as from 1st January 2014. As from 1st January 2016 the 15% tax rate is also applicable to rented properties for commercial purposes.
Once an individual or company declares the annual income from such rented property and gives the required details in respect of the property on the prescribed form, the individual or company will pay a flat rate of 15% tax on the total gross rental income received.
The scheme is a voluntary one, meaning that the Government is allowing rental earners to opt to retain the existing tax regime for rental income.
Should taxpayers, whether companies or individuals persist in not declaring income from rent, or declare only part of their undeclared rental income, they will be obliged to pay the full 35% tax rate, in addition to any penalties and interests, following an investigation carried out by tax authorities.
Procedure to pay the 15% tax on rental revenue
Person benefiting from this rate need to submit Form TA24. This form can be submitted electronically by clicking here
The Person (individual or company) is to give the details of the rented properties. For each property the gross rental revenue is to be given.
The person is to calculate 15% of the gross rental revenue received as the tax due to the Inland Revenue Department.
The Form together with the relative payment covering the amount of tax due is to be made by latest 30th June of the following year.
For more information call the Inland Revenue Department Customer Care on 153 or email on email@example.com.