rental – Muhasebe News

Is it possible to write off the investments for the rental office as expense at once?

MuhasebeNews — Wed, 03 Apr 2019 15:19:18 +0000

Is it possible to write off at once the reparation, maintenance and renovation expenses of our rental warehouse and office of our company that does construction material business?

The investment is entered in 264 account. It is written off as an expense by extending it over the rent period.

Explanation of the 264 Special Costs Account: It includes the expenses made for the development of the leased rental properties or to continuingly increase their economic value and the amounts of the assets that are made for the usage of the real estate property and will be left to the landlord at the end of the rental agreement.

Functioning of the 264 Special Costs Account: The expenses are entered to this account as debt. These amounts are redeemed in equal amounts in the rent period or in 5 years if the rent period is more than 5 years.

Source: İSMMMO
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Examples Related To Rental Income Declaration- Actual Expenses Method

MuhasebeNews — Fri, 29 Mar 2019 14:30:03 +0000

Example: Taxpayer (B), living in Poland, leased out his flat in Antalya and obtained 15.000 $ as rental income in 2018. He preferred the actual expenses method and he has no other income to declare in Turkey. His total actual expense for this house is 3.000 Dollars.

On the date of collection and expenditure, buying rate for Dollar announced by The Central Bank of Republic of Turkey is assumed as 5,50 TL.

Total Revenue = 15.000 $ x 5,50 TL = 82.500 TL

Total Expenses = 3.000 $ x 5,50 TL = 16.500 TL

(Taxpayers who have chosen the actual expenses method will not deduct the expense corresponding to the amount subject to exception from their income, but only the expense corresponding to the amount subject to taxation. Thus, first the total expenses corresponding to the total taxable revenue should be determined. Deductible expenses corresponding to the taxable revenue is calculated as follows:)

Deductible expenses = Total expenses x Taxable Revenue* / Total Revenue

* Taxable Revenue = Total Revenue – Amount of exception for rental income from house

= 82.500 – 4.400

= 78.100 TL

Amount of exception corresponding to taxable revenue (Amount of deductible actual expenses)

= 16.500 x 78.100 / 82.500 = 15.620 TL

Income tax for rental income of taxpayer is calculated as follows:

Total Gross Revenue (15.000 $ x 5,5)	82.500 TL
Amount of exception	4.400 TL
Balance (82.500 – 4.400)	78.100 TL
Amount of deductible actual expenses	15.620 TL
Taxable Income (78.100 – 15.620)	62.480 TL
Amount of income tax calculated	13.749,60 TL
Amount of income tax payable	13.749,60 TL
Stamp duty	72,70 TL

Source: GİB
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Examples Related To Rental Income Declaration- Lump Sum Expenses Method

MuhasebeNews — Fri, 29 Mar 2019 13:30:57 +0000

Example: Taxpayer (A), living in Germany, leased out his flat in Ankara and obtained 15.000 € as rental income in 2018. He preferred the lumpsum expenses method and he has no other income to declare in Turkey. On the date of collection, buying rate for Euro announced by The Central Bank of Republic of Turkey is assumed as 6 TL.

Income tax for rental income of taxpayer is calculated as follows:

Total Gross Revenue (15.000 € x 6 TL)	90.000 TL
Amount of exception	4.400 TL
Balance (90.000-4.400)	85.600 TL
Lump-sum Expenses	(85.600 x 15%) 12.840 TL
Taxable Income	(85.600 – 12.480) 72.760 TL
Amount of income tax calculated	16.525,20 TL
Amount of income tax payable	16.525,20 TL
Stamp duty	72,70 TL

Rental Income From Immovable Property In Terms Of Double Taxation Agreements

MuhasebeNews — Thu, 28 Mar 2019 14:30:57 +0000

Rental income from immovable property is mentioned in Article 6, titled “Income from Immovable Property” and Article 12, titled “Royalties” of Double Taxation Agreements that Turkey concluded.

Article 6 of the Agreements mainly deals with income from leasing of immovable properties and related rights, and provides that the State where the immovable property is situated has the right of taxation. Accordingly, taxation of the rental income from the immovable property situated in Turkey of individuals resident in the other State will be in accordance with the procedure and principles of domestic legislation of Turkey and in these Double Taxation Agreements there is not any provision limiting the domestic legislation.

For example, Taxpayer (D) who is living in Germany will be taxed in accordance with the domestic legislation of Turkey in case he rents his property in Bodrum.

Turkey has a limited right of taxation from the rental income of nonresident taxpayers obtained by leasing royalties defined in Article 12 of Double Taxation Agreements.

Rate of withholding to be made on the mentioned income may vary from state to state in the Agreements. If the rate specified in Article 12 of the Agreement and the rate defined in our domestic legislation differs, the calculation should be made according to the lower rate.

For example, Taxpayer (E) who is a musician and living in Netherlands had given the copyright of her music album to a music production company in Turkey. The payments of copyright fees that would be done to Mrs. (D) by the music production company are subject to 10% withholding tax according to the Article 12 of Double Taxation Agreement between Turkey and Netherlands.

As the example above, the payments that would be done by the comic paper to Taxpayer (F) who is a caricaturist and living in Netherlands, are subject to 10% withholding tax according to the Article 12 of Double Taxation Agreement between Turkey and Netherlands, in case he gives the usage right of the cartoons he drew to the comic paper in Turkey.

However, in order to be taxed in line with Article 12 of Double Taxation Agreement, residents (full taxpayers) of other country who derive income or profit from Turkey, should submit certificate of residence received from competent authorities of their own resident country along with the translated copy of it into Turkish language which will be approved by a notary public or Turkish Consulates in that country, to the related tax office or the tax withholders in case withholding tax is required. The tax withholders are required to keep the certificates of residence to submit to the competent authorities on demand. In case of failure of submitting the certificate of residence, domestic laws shall be applied instead of the Articles of the Agreement.

The taxes that would be paid by Turkish citizens, who are living in foreign countries related with the incomes they earned in Turkey, would be deducted or exempted at the countries they are living in accordance with the Double Taxation Agreement with that country.

Source: gib.gov.tr
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

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Are we required to declare rental income?

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Expenses To Be Deducted When Determining The Rental Income? -Actual Expenses Method

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What Are The Expenses To Be Deducted When Determining The Rental Income? -Lump Sum Expenses Method

How to pay the rental income tax?

MuhasebeNews — Thu, 28 Mar 2019 13:55:01 +0000

Income tax calculated on the declaration is paid in two equal installments in March and July of 2019.

The first installment must be paid with the stamp tax until april 1, 2019.
The second installment must be paid until july 31, 2019.

Tax can be paid ;

on www.gib.gov.tr (Interactive Tax Office and GİB Mobile application)

– with credit cards of contracted banks

– with bank cards or bank account of contracted banks

– with bank cards, credit cards and other payment methods of banks operating in foreign countries

to contracted banks

-branches

-alternative payment channels (internet banking, telephone banking, mobile banking

to Postal And Telegraph Corporation (PTT)
to all tax offices.

You can learn how to calculate your income tax you are supposed to pay by using “Calculations” section from webpage www.gib.gov.tr . (www.gib.gov.tr —Homepage—Internet Tax Office—Transactions without Code—General Inquiry and Calculations—Calculation of Rental Income)

Source: gib.gov.tr
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

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Are we required to declare rental income?

What is the tax withholding legislation for rental payments?

Expenses To Be Deducted When Determining The Rental Income? -Actual Expenses Method

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What Are The Expenses To Be Deducted When Determining The Rental Income? -Lump Sum Expenses Method

When to declare the rental income?

MuhasebeNews — Wed, 27 Mar 2019 12:00:04 +0000

For the period January 1, 2018 – December 31, 2018 ; taxpayers should submit declarations concerning their income from immovable properties between the dates of March 01-25, 2019.

It is possible to send the declaration via “Prefilled Income Tax Return System” on the internet.
If non-resident taxpayers have tax representatives in Turkey, they will submit their declarations to the authorized Tax Office of their tax representatives’ location and if they do not have tax representatives in Turkey, they will submit their declarations to the authorized Tax Office of immovable property location.
In accordance with the Law No. 3568, authorized tax professions can use e-Declaration system by signing a contract with taxpayers.

In the Prefilled Income Tax Return System, declaration will be deemed electronically approved.If the declaration is sent through normal postal service or private postal distribution companies, it will be deemed to have been submitted on the date it arrives on document registration date at tax office, and if it is sent as registered (First Class Mail etc.), it will be deemed to have been submitted on the date registered on envelope by PTT.

SIMILAR CONTENTS

Are we required to declare rental income?

What is the tax withholding legislation for rental payments?

Expenses To Be Deducted When Determining The Rental Income? -Actual Expenses Method

What is considered as loss when determining the gross income from immoveable property?

What Are The Expenses To Be Deducted When Determining The Rental Income? -Lump Sum Expenses Method

Are we required to declare rental income?

MuhasebeNews — Mon, 25 Mar 2019 13:00:09 +0000

Non-resident taxpayers do not submit annual declarations for the income from immovable property which are subject to withholding tax in Turkey. Also, in case that they submit annual declaration for other income, they do not include the income which is subject to withholding tax in their declarations.

Taxpayers who have only rental income from immovable property in Turkey will submit annual tax declaration, if;

their rental income from house exceeds tax exception amount (4.400 TL for the year 2018); and,
their rental income not subject to withholding obtain from leasing of the properties and rights within a calendar year

On the other hand, rental income which is subject to withholding will not be declared the annual tax return regardless the amount.

Every member of a family has to submit a declaration on their own behalf for the rental income they obtained from the property and rights belonging to them.

On the occasion that minor and restricted persons are taxpayers; the annual declaration to be submitted on behalf of them is signed by their parents, guardians or curators.

In case of having property and rights with shares, every partner should declare the rental income corresponding to his/her own shares.

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What is the tax withholding legislation for rental payments?

MuhasebeNews — Sat, 23 Mar 2019 08:58:13 +0000

Persons, corporations and entities who rented property and rights in accordance with Article 94 of Income Tax Law are obliged to withhold income tax on the gross amount of payments made for rent.

Those people and enterprises that are tenants have to withhold income tax from the gross amount of their rental payments at the rate of 20%.

This withholding tax will also be made from the rent paid in advance for the upcoming months and years.

For example; when the rent is paid in advance for 3 months or 1 year for a workplace, the total rent paid will be subject to tax withholding.

If tenants are taxpayers whose commercial earnings determined according to simple method, they shall not withhold in rental payments.

In case that the immovable property leased out is used both as house and workplace; the total rent is subject to withholding as long as it is used as workplace partially or in whole.

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Expenses To Be Deducted When Determining The Rental Income? -Actual Expenses Method

MuhasebeNews — Wed, 20 Mar 2019 12:43:06 +0000

Deduction of Expenses in the Actual Expenses Method

Taxpayers who have opted for the lump sum method can, after deducting the amount of exception from their rental income, set off the lump sum expenses at 15% of the remaining amount against actual expenses.

It is not possible to opt for lump sum expenses method in the case of leasing rights. For instance, taxpayers, who gain office rental income and income from leasing rights, should choose actual expenses method since they should declare rental income from leasing rights at their tax return.

Taxpayers who have chosen the lump sum expenses method cannot choose actual expenses method before two years have elapsed.

Lump sum expenses rate is determined at 15% of the revenue to be applied to rental income from 1/1/2017.

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What Are The Expenses To Be Deducted When Determining The Rental Income? -Lump Sum Expenses Method

MuhasebeNews — Tue, 19 Mar 2019 08:00:06 +0000

In the taxation of rental income, the net amount of the income obtained is determined in two different ways as follows:

Actual expenses method
Lump sum expenses method (for other than those who lease rights)

The selection of the actual expenses or lump sum method should cover all immovable property, which means that it is not possible to choose the actual expenses method for some part and the lump sum expenses method for the remaining part.

Deduction of Expenses in the Lump Sum Expenses Method

If the actual expenses method is chosen, following actual expenses can be deducted from the gross amount of rental income:

Lighting, heating, water and elevator expenses paid by lessor for rented property,
Management costs which are measured according to the importance of property and related with the administration of the rented property,
Insurance expenses relating to the rented property and rights,
Interest of debts relating to the rented property and rights,
5% of acquisition value of one rented house for 5 years beginning from the date of acquisition (This deduction applies only to rental income of the rented house; non-deductible part is not evaluated as expenditure surplus. This deduction is not valid for houses acquired before 2014), Deduction of 5% of the acquisition value applies only to one real property rented as house.
For real properties rented as workplace, such expense deduction is not applicable.
Taxes, duties and fees paid for the rented property and rights and rates paid to municipalities for expenses by lessor,
Depreciation setting aside for rented property and rights, and heat insulation and energy saving expenditures which are made by the lessor and that increase the economic value of the real estate. (These expenditures can be considered as cost if it exceeds 1000 TL for the year 2018.)
Repair and maintenance expenses incurred by lessor for the rented property,
Rents and other actual expenses paid by sub-lessors, Rent of the house accommodated by the lessors who rent their own property, (non-deductible part is not evaluated as expenditure surplus), It is not allowed for taxpayers not residing in Turkey, (including Turkish nationals who reside abroad more than a continuous period of six months with residence or work permit) to deduct the amount of rents they pay in a foreign country from their rental income obtained in Turkey.
Cost of loss, detriments and compensations paid for rented property and rights based on a contract, law or court decree.

Calculation of deductible expenses in case of exception in actual expenses method

Where a taxpayer chooses the actual expenses method and benefits from the exception applied to rental income from house, the amount of actual expenses corresponding to exception is not deductible from gross revenue.

The deductible amount is calculated as follows:

Deductible expenses = Total Expenses x Taxable Revenue
Total Value

(*) Taxable Revenue = Total Revenue – Exception for Rental Income from House

Example: Taxpayer (C) rented her house in 2018 and obtained 38.000 TL of rental income. Taxpayer, who has no any other income, incurred 9.500 TL of expenditure for his property and choses the actual expenses method.

The amount that taxpayer can deduct as actual expenses will be the amount that corresponds to the taxable revenue of the total expense for 9.500 TL.

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