Once more we make a reference to the newly introduced optional 15% flat rate tax on gross rental income for residential properties (including garages), announced in the last Budget applicable as from 1 January 2014. Such tax shall be final and no set off or refund shall apply.
The new flat rate is aimed to encourage more people to declare such revenue. Increased fiscal control is now expected in this sector and if undeclared rentals are uncovered, these would be subject to a final tax of 35% on the gross income derived together with penalties and interest.
As a one-time concession the Government is now enabling individuals who would have failed over the years to declare rental income derived from residential property (including garages) to declare it and be deemed received during 2014. If such individual opts to declare the said rental income for more than 1 year, the total amount subject to the 15% final withholding tax shall not exceed an amount equivalent to two times the weighted average over the relevant number of years.
If you would like to know more on this one-time concession or on the new tax regime for rental income, please contact our tax team: