Short term (daily) rental

One of the local Administrative Courts has issued a judgment concerning taxation of income from short term rental. The court stated that short term (daily) rental cannot be treated as a so called private renting and taxed with a 8,5% flat rate. Such activity fulfils the definition of a business activity, since it requires organized, continued and professional operations and is aimed at profit. Therefore, income from short term rental can only be taxed in accordance with methods provided for business activity.

This recent decision may result in tax offices reviewing PIT-28 tax returns. In case rental income of a taxpayer falls into the above definition, it shall be taxed in accordance with the progressive scale, that is 18% and 32%, which will result in tax arrears.

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