ArmInfo. The State Revenue Committee of Armenia has provided clarifications on issues related to real estate rental due to the new legislative reforms on declaration of property and payment of income tax on rentals that came into force on December 1, 2023.
1. When to submit declaration when renting out real estate?
For rental transactions made before December 1, 2023, the declaration must be submitted to the tax authority by February 1, 2024, and in the case of rental transactions made after December 1, within 5 days after the actual rental of the property. If rental income ceases, the declaration must also be submitted within 5 days of the date of termination.
2. How to submit declaration to the tax authority?
When renting real estate, a contract must be signed, which must undergo state registration. However, if it has not received state registration, then it is necessary to submit a leasing application to the tax authority.
To submit a declaration, you have to come to any SRC service office, having with you an identification document (passport or identification card) and a public service number. If you are not yet registered with the tax authority and do not have a taxpayer registration number (TRN), then you will be issued a TRN, after which you will be able to submit a declaration.
You can also submit a declaration, the attached application and an application for a taxpayer registration number online - through a single electronic request platform www.e-request.am. 3. How to submit declaration if you have rented out real estate in the Republic of Armenia but live abroad?
If you have rented out real estate in the Republic of Armenia but live abroad, you can also apply for a taxpayer registration number, application and attached application through the www.e-request.am platform.
4. When and how to pay income tax when renting out real estate?
To pay income taxes calculated on rent for 2023, the return must be filed electronically by May 1, 2024.
When renting out real estate, the taxpayer is required to pay income tax at a rate of 10% of the rent. Moreover, if the gross rental income for the reporting year exceeds 60 million drams, then an additional income tax of 10% is calculated and paid on the portion exceeding this amount. In case of delay in payment of tax beyond the established deadline, the taxpayer shall pay a penalty in the amount of 0.04% for each day of delay.
5. Sanctions for non-compliance with the requirements of the Tax Code
In case of non-compliance with the requirements established by the Tax Code, a fine is established in the amount of 5% of the cadastral value, close to the market value, but not more than 500 thousand drams. In case of repeated violation within a year, a fine of 10% is levied, but not more than one million drams.
Earlier, head of the State Revenue Committee of Armenia, Rustam Badasyan, said that the tax authorities will start fining citizens who have not submitted an application for real estate lease from February 1.
