Every year, we are required to clear the previous year's accounts with the state and for that we must deliver the annual IRS statement in a timely manner. Please note that there are always deadlines for doing this.
Usually the delivery of this declaration takes place between the beginning of April and the end of June.
The submission of this declaration is made exclusively on the website Finance Portal, through their access credentials (TIN and password).
Those who do not yet have a password, must register on the Portal - the password will be sent by post to the address indicated.
Paper deliveries are over.
IRS - Income Tax for Individuals
In terms of IRS, the income from local accommodation is included in the Category B - business and professional income.
However, for the purposes of calculating the taxable income and the respective taxation, you can choose to Category F - property income.
Category B
Calculation of taxable income
The taxable income is income subject to IRS and can be calculated using the simplified regime or organized accounting.
This, if you get a billing up to 200 thousand euros per year. Above that amount, organized accounting must be applied. In that case, you must hire a certified accountant.
Simplified regime
In the simplified regime, taxable income is determined by applying a coefficient.
In practice, the coefficient functions as an automatic deduction, causing the tax to be levied only on part of the income obtained and not on the whole.
In the case of local accommodation, in the form of housing and apartment, the applicable coefficient is 0.35. This means that only 35% of income is taxed. The remaining 65% are considered necessary costs for the exercise of the activity, part of which (15%) is conditional on the presentation of expenses and charges actually incurred. If these 15% are fully justified, the taxable income is affected and, consequently, the tax is increased. One of the expenses that counts to fill these 15% is the specific deduction applied to dependent work in the amount of 4,104 euros or, if higher, the amount of contributions paid to mandatory social security schemes. In this way, through the specific deduction, whoever has category B income up to at least 27,000 euros, has already 15% automatically justified.
In the form of accommodation establishments, the coefficient is 0.15. The taxable income thus corresponds to 15% of the income obtained, the remaining 85% being automatically assumed as activity costs. Here, there is no need to justify any expenses.
Organized accounting
In organized accounting, the tax base is calculated according to IRC terms and rules, with the necessary adaptations. Organized accounting can be advantageous compared to the simplified regime if the costs of the activity are higher than 65% of the income obtained, since it is possible to deduct all costs with the activity. But it is necessary to count on the fees of the certified accountant.
If a loss is determined, it can be deducted from the profits that it will eventually have in the next 12 years. However, the loss deduction cannot exceed 70% of profits each year. That is, you must always pay IRS on 30% of profits.
Taxation
Taxation is done by bundling. That is, the taxable income from the local accommodation is added to the income from other categories that you may have. THE IRS fee is the one that corresponds to the step in which it will be after adding all income.
IRS fee
The tax rates are as shown in the following table: (Drafting of Law No. 114/2017, of 29 December)
|
Taxable income |
Fees |
|
|
Normal |
Average |
|
| Up to 7091 |
14,50 |
14,500 |
| From more than 7091 to 10700 |
23,00 |
17,367 |
| From more than 10700 to 20261 |
28,50 |
22,621 |
| From more than 20261 to 25000 |
35,00 |
24,967 |
| From more than 25000 to 36856 |
37.00 |
28,838 |
| From more than 36856 to 80640 |
45.00 |
37,613 |
| Greater than 80640 |
48,00 |
– |
Gains
In category B, you are required to allocate your property to the activity of local accommodation, which generates capital gains for taxation in category G. However, the taxation of these capital gains is suspended until the property eventually returns to the private sphere. At that time, capital gains are calculated by the difference between the realization value (market value of the property on the date of return to private equity) and the acquisition value (market value of the property on the date of allocation to the local accommodation activity) ). This is one of the disadvantages of taxation by category B. If you choose to transfer the property from category B to category F, the taxation of capital gains remains suspended.
Category F
Calculation of taxable income
For category F, the taxable income corresponds to the difference between the income obtained and the expenses foreseen in this category, which include all expenses to obtain or guarantee the income, monthly fees for the condominium, works and IMI. From the outside, there are charges for bank loans, furniture, appliances, comfort or decoration items and AIMI (Additional to the Municipal Property Tax).
Taxation
There are two paths. Income may be taxed by aggregation, as referred to in category B. If losses are determined, these can be deducted from positive income in the same category in the following six years.
Another possibility is to be taxed autonomously, at the rate of 28%. This last option - available for apartment and housing - pays off if the average IRS rate resulting from the merger is greater than 28%.
Attention: The option for category F is made annually at the time of delivery of the IRS.
Before opting for category F, simulate the delivery of the IRS for this category and category B.
IRC - Corporate Income Tax
This is another of the taxes of the local accommodation on the income that you must take into account, if you choose to form a company. But beware, the rules are more complex and involve higher costs. Before proceeding to set up a company to operate a local accommodation, you should consult with a certified accountant.
Find out how to complete your IRS in the article created by Local Accommodation, here!
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