Question: Does an individual who does not use the labor of hired employees have the right to rent their property out real to a legal entity without registering as an individual entrepreneur?
Answer: Considering that an individual's income from property rental to a legal entity, a tax agent under concluded civil law contracts is classified as income subject to taxation at the source of payment, if the individual does not use the labor of hired employees on a permanent basis, such an individual has the right not to register as an individual entrepreneur.
In this case, the legal entity, the tax agent independently calculates, withholds, and transfers individual income tax (IIT) to the budget from the paid income, and also submits the relevant tax reporting. If the IIT is fully calculated, withheld, and transferred by the tax agent, the individual has no obligation to submit a declaration of income and property in respect of such income.
At the same time, when receiving income from property rental to several legal entities, it is necessary to consider the total amount of income. If the threshold of 8 500 MCI established by the Tax Code is exceeded, the individual may incur obligations to independently declare income and pay IIT at the rate of 15% on the excess amount.