See how Flatio taxation works and where you can find your billing statements, with a specific detailed guide for Czech landlords.
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See how Flatio taxation works and where you can find your billing statements, with a specific detailed guide for Czech landlords.
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You often see stories about renting online and paying taxes in news headlines. You may be afraid that renting through Flatio does take special regulations into account. However, deciphering the taxation (or getting your sales records) for Flatio rentals is not as complex as it might seem at first.
NOTE: The following information is for landlords renting in the Czech Republic. Regulations for other countries will vary.
When taxing rental income and deciding whether or not this income is subject to sales records (according to Act No. 112/2016 Coll. On the Registration of Sales), it is necessary to realize what form of rental you provide. The Income Tax Act (No. 586/1992 Coll., On Income Taxes, as amended, hereinafter referred to as the "ITA") distinguishes between two types of income - income from an independent activity and rental income.
Each form of rental accommodation has its own characteristics, from which it is relatively easy to infer to which category rental income falls. The most important feature of this assessment is the nature of the accommodation and the length of time for which the accommodation is rented. It is, therefore, necessary to assess whether you are renting for short-term and recreational purposes or for the purpose of securing a household. It is also necessary to consider any additional services that are provided with the lease, such as regular cleaning, catering services, bed linen change, etc. The type of accommodation from which the accommodation can be rented or from how the price is displayed.
So how can we distinguish accommodation service from rent for proper taxation and registration of sales? For a list of the characteristics of each type, see below.
It is a way of doing business that is done on a trade license and is, therefore, part of your business. The character of this income includes the activities of hotels, motels, guest houses, or short-term accommodation in their own apartments/houses offered systematically through Airbnb platforms, Booking, etc.
It is also possible for a trade license to incur an obligation to record sales.
The most common features are as follows:
Mostly this includes renting apartments or family houses for the purpose of long-term housing. If the leased property is not part of the business property, the income tax from these leases is set according to § 9 of the ITA, otherwise pursuant to § 7 of the ITA.
The most common features include the following:
There is no obligation to record sales for these revenues.
This is just as simple as paying income tax from long term rental, so according to § 9 of the ITA (unless it is part of a business asset). Although some of Flatio's leases may fall into the income category, Flatio leases with rental income are more common. These leases are also exempt from VAT.
You can also read more about tax issues and their non-payment on our blog here.
The easiest way to get this information is to use the individual billing that Flatio generates for you on a monthly basis, in which you will find a clear breakdown of rents received from tenants along with landlord's fees (commissions for Flatio).