Taxpayer may opt to pay the flat rate of taxation of 15% tax on rental income which applies to both residential and commercial property, but excludes rent from related parties. This 15% tax rate is an option that may be used by both individual taxpayers as well as companies.
In the event that a taxpayer wishes to avail himself of this reduced tax rate for the rental income earned during the calendar year of 2018, then submission of the prescribed form provided by the Inland Revenue Department referred to as TA24 needs to be submitted together with the tax payment by not later than the 30th April 2019. The Inland Revenue Form shall request details of the property that is being rented out, the gross income received from the rental of such property and details of the taxpayer.
The 15% tax rate is calculated on the gross income and therefore no expenses may be deducted. This tax is final and no set-off or refund shall apply.
Taxpayers may exercise to opt for such tax rate on an annual basis. Thus, a taxpayer may elect to have the rental income taxed at 15% one year, and the following year decide to declare such income in the tax return and have it taxed at the normal, applicable tax rates.
