“Taxes protect”: taxation of additional income from renting out apartment

Ministry of Finance of Ukraine, together with the State Tax Service, continue to inform citizens about importance of conscientious tax payment using examples of everyday life situations as a part of the communication campaign “Taxes protect”.

There is the sixth story of the campaign – this time about a teacher who receives additional income from renting out her apartment. Using this example, we explain what taxes must be paid on such income, how they are distributed and what public services are provided.

39-year-old Inna works as a high school teacher in Lutsk. She rents out her grandmother’s apartment in Ivano-Frankivsk for 12 000 UAH per month (36 000 UAH /quarter; 144 000 UAH /year). In order to officially receive additional income, Inna registered her activities as an individual-entrepreneur of Group II. This allows her to officially provide rental services to citizens of Ukraine and single tax payers (i.e. other individuals-entrepreneurs).

Once a year, Inna submits tax declaration through the taxpayer’s Electronic cabinet on the State Tax Service’s web portal. She also pays military levy and single tax every month. Inna does not pay single social contribution on income from renting out apartment, because this tax is deducted from her official salary as a teacher by her employer.

Result for the year looks like this:

If Inna receives rent on a personal bank card or in cash without using RRO/PRRO and does not declare additional income, it turns out that she does not pay taxes on it. Then:

- militaries does not have quality tactical first aid kits to save lives on the battlefield,

- children’s ward of the hospital does not have inhalers for children to recover quickly.

 Taxes protect. Help with your contribution!

Communication campaign is being implemented by the Ministry of Finance of Ukraine together with the State Tax Service with funding from the Great Britain’s Government through the Department of Foreign Affairs and International Development. Information presented in the campaign materials does not necessarily reflect views of the Great Britain’s Government.