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Tax on Income from Urban Estate

Determination of Taxable Income. — The taxable income is obtained by deducting from gross income the cost of maintaining and working the estate. These costs are reckoned according to the nature of the property and the purposes for which it is used. The amount is fixed by the Finance Minister and varies from one town to another between 20 and 95 per cent of gross income, according to the property.

Exemptions. — The following property is exempt from this tax: estates belonging to the Government and to public corporations or to religious and cultural foundations, charitable and educational institutions, hospitals, etc.; also, subject to reciprocity, premises belonging to foreign diplomatic representatives. Moreover, no tax is collected if it amounts to less than 2 lats per estate. New dwelling-houses are not taxable for the first three years.

Computation of Tax. — The rate is 1½ per cent of the rental value of the property; 75 per cent of the yield goes to the commune in which the property is situated.

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