The situation: An owner rents out his second flat and takes the rent in cash without declaring it, thinking a 'small personal income' needs no tax.
Applicable law: Rental income from property is subject to individual income tax, and other rent-related taxes may apply depending on locality. It is declared and paid voluntarily; evasion exposes the owner to collection of arrears, fines and late-payment interest on discovery (especially when a tenant requests an invoice or a tax deduction for rent, revealing the income). Many cities offer simplified rates for individual landlords.
Outcome: When the tenant asked for an official invoice, the income surfaced, and the owner paid the tax due plus a fine that voluntary declaration would have avoided.
💰 Tax · Awareness case
Your Rental Income Is Taxable Too · Yalla China
🤝 Governing law: 个人所得税法 / Individual Income Tax Law
You rent out a spare flat — do you owe tax on the rent?
Illustrative, general educational examples — not real specific facts and not legal advice; for awareness only. For an actual situation, consult a licensed lawyer.
🎓 The lesson / takeaway
Lesson: Rental income is taxable and doesn't disappear because it's cash. Declare voluntarily; the tenant's rent-deduction claim can expose you.
🕒 Updated: 16 March 2026