See with us how to save on your income tax return
You own premises that you have leased to your company. See how you can obtain significant savings in your IRPF by agreeing with your company to collect the rent every two years and one day…
Taxation in RENTA and IS
IRPF
You are the owner of the premises where your company carries out its activity, and so you receive monthly rent from it.
Well, if you formalise a new rental contract and agree that the payments will refer to periods longer than two years (for example, you agree to a payment every 25 months), you will save a good amount on your personal income tax.
Specifically, you will enjoy a 30% reduction in this tax on the net income you obtain.
IS and withholding tax
In these cases, regardless of when the payments occur, your company must account for (and can deduct) the accrued rent expense each year.
For example, at the end of the first year, even if no payments have been made, you will be able to account for the proportional rent expense.
With regard to withholding, your company must withhold as you pay rent, and not before (withholding will occur if the combined cadastral value of the premises you have rented or offered for rent does not exceed EUR 601,012.10).
Related transaction
However, if you own at least 25% of the capital of your company, the rent must be valued at market prices.
Therefore, since you have changed the frequency of payments, you cannot set a price equal to that of a monthly lease, but must take into account the financial effect of the change.
Since you will receive the rents later, you will have to charge a higher total amount than before, calculated at a market interest rate.
Example of saving on rent
Leasecontract
You have a rental contract with your company for which you receive 2,500 euros per month, and you are going to replace it with a six-year contract with a payment at the end of the third and sixth year.
Based on a market interest rate of 7%, the amount of the annual payments in each case would be as follows:
| Year | Monthly fee | Charged every three years |
| 1 | 30.000 (1) | – |
| 2 | 30.000 | – |
| 3 | 30.000 | 99.187 |
| 4 | 30.000 | – |
| 5 | 30.000 | – |
| 6 | 30.000 | 99.187 |
2,500 euros/month × 12 months.
Income tax savings
Once the amount of the payments to be made in each case has been calculated, if the annual rental costs amount to 6,000 euros and you pay personal income tax at a rate of 45%, your total taxation over the six years of the contract will be as follows:
| Year | Charged monthly | Charged every three years (1) | |||
| Rdto. | Quota 45%. | Rdto. | Reduced Rdto. | Quota 45%. | |
| 1 | 24.000 | 10.800 | -6.000 (2) | -4.200 | -1.890 |
| 2 | 24.000 | 10.800 | -6.000 | -4.200 | -1.890 |
| 3 | 24.000 | 10.800 | 93.187 | 65.231 | 29.354 |
| 4 | 24.000 | 10.800 | -6.000 | -4.200 | -1.890 |
| 5 | 24.000 | 10.800 | -6.000 | -4.200 | -1.890 |
| 6 | 24.000 | 10.800 | 93.187 | 65.231 | 29.354 |
| Personal income tax | 64.800 | 51.148 | |||
| Updated share (3) | 51.479 | 37.315 | |||
As the periodicity of the payments is more than two years, you can benefit from a 30% reduction on the income obtained.
In the years in which you do not obtain income, you must continue to declare the expenses derived from the rent.
In order to correctly compare the IRPF payments to be made, they are updated at a rate of 7%.
Formalise a new rental contract in which the payments are more than two years apart. In this way you will be able to apply a 30% reduction in your personal income tax, thus saving a good amount in taxes.
