Do utility charges constitute income for lump sums?


Is the utility charge taxable?

There are many doubts about the taxation of utility charges incurred by tenants. Should they be taxed at a lump sum? Are they income? These bothering questions will be answered in this article.

Usually, the tenant, when concluding a rental agreement, undertakes to pay the rent and other expenses related to its maintenance, such as electricity, gas, water or heating.

According to Art. 6 sec. 1a of the Lump-sum Income Tax Act, lump-sum taxation also applies to money and monetary values ​​received or made available to the taxpayer in the calendar year as well as the value of benefits received in kind and other free benefits under rental, sublet, lease, sublease or other contracts of a similar nature.

An element of the income achieved by the property owner will certainly not be fees for utilities related to the premises, if, in accordance with the contract, the tenant is obliged to bear them. They do not fall within the concept of "benefits in kind and other gratuitous benefits" referred to in Art. 6 sec. 1a of the Act, as well as they do not cause a financial gain on the part of the landlord.