The President signed a decree on additional measures to support the population, businesses, catering, trade and services to reduce the negative impact of the coronavirus pandemic.
According to the STC press service, the decree provides for the followings:
- individuals are exempt from income tax on income from the lease of real estate;
- the procedure for applying the minimum rates of rent for tax purposes to individuals, who lease a property (buildings and motor transport), is suspended.
How can the personal income tax benefit be applied and why has the minimum rental rate been abolished?
According to the decree, from July 1, 2020, to December 31, 2020, individuals will be exempt from paying personal income tax on income from the lease of real estate.
If the legal entity leases the property from an individual, no payment is deducted from the lessor for the specified period, and the amount of tax in the personal income tax return must be completed in the privilege section.
The procedure for applying the minimum rental rates for tax purposes to individuals, who lease a property (buildings and motor transport), is suspended.
Now a contract is concluded between the lessor and the lessee on the basis of a voluntary agreement, determining the amount of rent.
The obligation to conclude lease agreements on the basis of minimum rental rates has been abolished until December 31, 2020.
Landowners have been recommended to revise the rent in order to reduce the amount for 2020, including taking into account the tax benefits provided.
Restructured lease agreements can be registered electronically through a personal account or by visiting the State Tax Inspectorate in compliance with quarantine requirements. Under the restructured contracts, the overpayment of income tax may be refunded to the account of the individual upon application or transferred to him for the payment of land and property taxes assessed for the current year.