Rental income tax
How to Calculate Income Tax from Rentals in 2024?
In Romania, starting in 2024, rental income tax will change significantly, differing based on whether the tenant is an individual or a legal entity.
How do you calculate rental income tax in 2024?
Specifically, here’s what you need to know and do if you’re getting rental income in 2024:
- The government introduces a flat rate of 20% on gross income. The 10% tax remains unchanged, but starting January 1, 2024, tenants who are legal entities will pay it monthly.
- Register or declare lease contracts with ANAF within 30 days from the conclusion date.
Change Tax Regime Income Rents: what does it mean for companies or associations?
On the date of rent payment, the tenant (legal entity) will calculate the rent tax.
He will pay the owner, a natural person, the monthly rent established by the contract, but reduced by the calculated tax.
At the end of the respective month, the company will enter the rent tax, calculated and withheld from the owner (natural person). The tax declaration (D100) that it will submit to ANAF and will pay that tax by the 25th of the month next.
The company will submit an informative statement by February 28 of the following year, detailing the rents paid and tax withheld, accumulated by owner and year.
Therefore, the administrative burden of companies that use goods rented from individuals increases.
When two or more people own a rented property, each owner calculates and declares the tax on their share of the rental income.
The calculation formula for rental income tax is this:
Rent tax = (Monthly rent – 20% flat-rate expenses) x 10% tax rate.
In conclusion, the reforms to the taxation of rental income in Romania mark a significant change in the tax landscape, bringing with it an increase in administrative responsibility for companies and associations involved in renting from individuals.
Calculating taxation of rental income in Romania in a differently way, along with introducing a flat rate of expenses and changing how legal entity tenants pay tax, makes managing rental income more complex. These changes not only alter tax calculation and payment methods but also enforce a stricter reporting framework to ANAF.
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