How to calculate taxation on rental revenues in 2021

The year 2021 welcomes us with an avalanche of fiscal changes, some of them with a major impact on the incomes of companies and individuals.

Income tax

The incomes registered from rents are taxed, starting with January 1, 2021, with 10%, applied at a share of 60% of the total amount collected.

Example of calculating rental income tax:

We are considering a rental contract worth 2,000 lei, for one year.

Gross rent collected for one year: 2,000 lei * 12 = 24,000 lei

The taxable amount : 24,000 lei * 60/100 = 14,400 lei

Income tax due: 14,400 lei * 10/100 = 1,440 lei -> 120 lei per month

CASS contributions

The method of calculating CASS contributions has the biggest change this year. Thus, the percentage due increases from 5.5% to 10% of the amount collected, regardless of whether income is recorded from salary sources.

Instead, only annual receipts from different sources of wages exceeding the limit of 12 minimum gross wages require CASS contributions. The 10% quota is calculated only at the level of the minimum gross salary (2,300 lei / month). In the case of rents, the NET amount is taken into account, after the decrease of the rate of 40%

The limit is valid for all the independent salary incomes from 2020, so if you also have income from dividends or agriculture, you will have to calculate them together!

Calculation example (for the situation in which there are no other incomes besides the salary and the rent received):

        1. For a monthly rent of 4,000 lei (2,400 lei net / month calculation basis), higher than the minimum salary of 2.300 lei

• Gross annual rent: 48,000 lei
• Net annual rent (calculation basis): 28,800 lei
  
• Minimum gross annual salary: 27,600 lei
  
• CASS contributions: 10/100 * 28,800 lei -> 2,880 lei payable in 4 installments, the equivalent of 240 lei / month

        2. For a monthly net rent, lower than the minimum salary of 2,300 lei

             No CASS contributions are due!

In conclusion

 For monthly net rents exceeding the minimum gross salary of 2300 lei, the total rental taxes are:

• 6% of the total amount collected (income tax 10% of 60% of income) + 2,496 lei / year CASS

 For monthly net rents below the minimum gross salary of 2,300 lei

• 6% of the total amount collected (income tax 10% of 60% of income)

Source: titirez.ro