The Commission deems the financial assistance to be in harmony with the domestic market.
Wanting to monetize that extra bedroom or apartment? Platforms like Airbnb, Wimdu, and 9flats can be a great way to make some side income. But, to avoid any trouble with the tax authorities, remember these rules.
Know the Rental Income Thresholds
If you're renting out living space occasionally and earn less than 520 euros per year, no need to panic. You're off the hook for now — these earnings don't need to be declared in your tax return, but keep record of them just in case. However, if your rental income exceeds this, it's time to get your tax return ready.
For those who rent out living space permanently, the income should be disclosed in the tax return if it surpasses the threshold of 410 euros. This threshold is exceeded if your rental income minus expenses is above this amount.
Intent to Generate Income Matters
Your earnings are taxable if you have an intention to generate income. In most cases, the assumption is that permanent renters have such an intention. If your total rental income is higher than what you spend on rent, utilities, maintenance, and so forth, you're likely generating a profit.
For example, if you charge more to your guests than what you pay for rental and utilities, you're making a profit.
Shared Spaces and Calculation
Calculating costs becomes a bit tricky when only individual rooms are being rented out, and the apartment is still being used by you. In such cases, the total costs for the apartment are divided proportionally. For instance, if the rented room occupies 20% of the living space, then only 20% of the total apartment's costs can be considered while preparing the tax return.
When tenants and guests share common spaces, like the bathroom, their usage should be taken into account as well. The proportion of the total living space used by each individual should be calculated to divide the costs accordingly.
Avoiding Tax Evasion Suspicions
Renting out living space on a significant scale without declaring it in your tax return can raise red flags for tax authorities, especially with the wide-spread use of platforms like Airbnb. They do occasionally check these platforms to locate potential tax evaders.
Operators are also required to report users who have conducted at least 30 rental transactions per year or have generated an income of at least 2000 euros through the platform.
Key Takeaways
- Subletting living space through online platforms can have significant tax implications.
- All rental income must be reported on tax returns.
- If you generate surpluses through your rental activity (total income exceeding costs), it's considered taxable income.
- Keep accurate records of income, expenses, and any deductions claimed for tax purposes.
- Consult local laws and regulations for specific requirements.
- To effectively manage the tax implications of subletting living space through platforms like Airbnb, it's essential to understand the community policy on personal-finance matters, such as the identification of rental income thresholds and the intent to generate income.
- Along with understanding the tax implications, it's crucial to consider vocational training programs that focus on personal-finance management, as they can provide valuable skills for accurately reporting and managing income and expenses related to rentals, ultimately ensuring compliance with community policies.
