Individual taxation II

Rental income
Gross rental income consists of amounts in cash or in kind stipulated in the rental agreements and related to a fiscal year (regardless of the time of effective cashing), as well as certain expenses borne by the tenant and which, based on the law, are the landlord’s liability.

The taxable amount is determined by deducting a 25% expense quota from the gross income. Tax on rental income is determined by applying 16% on the taxable amount.

As an exception, taxpayers may opt for the determination of the net rental income based on single entry accounting.

Investment income Investment income includes:
• dividend income;
• interest income;
• gains from transfer of securities;
• income from futures/forward transactions with foreign currencies and other similar operations;
• income from liquidation/dissolution without liquidation of a legal entity.

Dividend income Dividends are defined as any grant of benefits in cash or kind by a legal entity to shareholders or associates as a consequence of holding participation titles (with certain exceptions). Any amount paid by a legal entity for goods or services provided by a shareholder is treated as dividend in case the value of such goods or services exceed the market value. Also, any amount paid by a legal entity for goods and services provided for a shareholder is considered dividend. Amounts received from holding participation titles in closed investment funds are treated in the same manner as dividends.

The tax rate applicable to dividends distributed to resident individuals is 16% and is calculated, withheld and paid by the payer of dividend. The tax should be paid by the 25th of the month following the dividend payment. In case of dividends distributed but not paid till the end of the year, the tax is payable by December 31st of that year. The dividend tax is final (i.e., the income is not subject to regularisation). The withholding tax for non-resident individuals is either 16% or a more favourable rate if a double tax treaty is applicable (refer to section on withholding taxes). [...]

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