In Kyiv, the tax office has already launched the practice of fining owners who neglect to file earnings from renting out their properties. This action bodes a crackdown on one of the most common ways for Ukrainians to bring traditionally tax-free income into the household. And soon, the new regulations will take hold in Kharkiv.
Not declaring one’s income from property rental costs the state budget millions of Euros annually. In Kharkiv, for example, only about 400 persons declared their rent incomes for 2014, while a cursory review of rental websites reveals that the number of homeowners looking for, and finding, lodgers runs into tens of thousands. Not all of them evade the taxman, of course: for example, if you are letting your apartment or workshop to a legal person, i.e. a company, it is the tenant who pays the tax.
Should the Kharkiv homeowners start worrying? The likely answer is ‘yes’. While the tax office has not been fining anyone yet, they do surf classifieds on the Internet to look for illegal rental deals. What’s more, they can easily locate and monitor the official status of properties using the State deeds register. Theoretically, this can lead to an administrative fine.