What tax aspects need to be considered when renting out company premises?
April 24, 2023 | 40,00 EUR | answered by Petra Höfer
Dear tax advisor,
I am Bernd Baradari and I own a small business that rents out commercial spaces. In recent years, I have been generating increasing profits from this rental business and now I am faced with the question of what tax aspects I need to consider.
Currently, I regularly receive rental income from the rental of the commercial spaces. These incomes are deposited into my account and I have not yet made any specific tax declarations or payments in relation to these incomes. However, as the incomes continue to increase, I am concerned that I may not be complying with tax regulations and could get into trouble.
My concerns specifically relate to whether I am correctly declaring the rental income for tax purposes and whether I may be able to take advantage of tax benefits or depreciation. I want to ensure that I am not committing tax evasion and that I am maximizing my financial situation.
Therefore, my question to you is: What tax aspects should be considered when renting out commercial spaces? Are there special regulations or opportunities to take advantage of tax benefits? How can I ensure that I declare my rental income correctly and avoid any tax risks?
Thank you in advance for your support and advice.
Best regards,
Bernd Baradari
Dear Mr. Baradari,
Thank you for your inquiry and your trust in my expertise as a tax advisor. It is good that you are considering the tax aspects of your rental income from leasing office spaces to minimize potential risks and to maximize tax benefits.
First and foremost, it is important to know that rental income must be reported as income from rental and leasing in your income tax return. This income is subject to income tax and must be disclosed to the tax office. Therefore, you should regularly file an income tax return in which you declare your rental income and, if applicable, also claim deductible expenses.
Deductible expenses are costs incurred in connection with the rental of the office spaces and are tax deductible. These include maintenance costs, administrative expenses, insurance premiums, property tax, or depreciation on the rented property. By claiming deductible expenses, you can reduce your tax burden and optimize your tax benefits.
Furthermore, you can also take advantage of the depreciation on the rented property (AfA). This involves the tax consideration of the depreciation of the building over time. AfA can also reduce your tax burden and provide you with tax benefits.
To ensure that you correctly declare your rental income and avoid tax risks, I recommend that you seek regular advice from a tax advisor. A tax advisor can assist you in preparing your tax return, show you tax planning opportunities, and keep you informed about current tax regulations.
I hope that my explanations have been helpful to you and I am available for any further questions.
Sincerely,
Petra Höfer
