How tax deduction is made from rental payments?
The person renting goods and services according to the Income Tax Law, article no.94, has to deduce income tax from rental payments.
1- Renters or rental institutions have to deduce %20 amount of income tax from rental payments on the basis of gross value.
2- Tax deduction will be made on the basis of annual paid rental amount.
Example: When 3 months or annual rental payment is collected, rent will be liable to tax deduction.
***If renter is liable to simple entry taxation, he/she does not have to deduce tax from rental payment since he/she does not have liability to deduce tax.
3- If real property is used as both a home and a workplace; the whole amount of rental payment will be liable to tax deduction.
Source:Tax Law
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