From July 1, 2025, what is the taxable prices for lease of assets in Vietnam?

From July 1, 2025, what is the taxable prices for lease of assets in Vietnam?

Pursuant to point d, clause 1, Article 7 of the Law on Value Added Tax 2024 (effective from July 1, 2025), the taxable prices are stipulated as follows:

Taxable prices

1. The taxable prices are prescribed as follows:

...

b) For imported goods, it is the taxable import value as stipulated by the law on export and import duties, plus the import duty, any supplementary import duties as prescribed by law (if any), plus special consumption tax (if any), and plus environmental protection tax (if any);

c) For goods and services used for exchange, internal consumption, gifts, donations, the VAT calculation price is the market price of similar or equivalent goods and services at the time these activities arise. For promotional goods and services according to commercial law, the taxable prices are determined as zero (0);

d) For lease of assets, it is the rental amount exclusive of VAT.

In the case of installment payments or advance payments for rental within the lease term, the taxable prices are the rental amount for each installment or advance payment for the lease term exclusive of VAT;

đ) For goods sold on installment or deferred payment, the price is the single payment sale price exclusive of VAT, excluding installment interest or deferred payment interest;

...

Thus, the taxable prices for lease of assets is the rental amount exclusive of VAT.

Note: In cases of installment payments or advance payments for the rental period, the taxable prices are the rental amount per installment or advance payment for the lease term exclusive of VAT.

From July 1, 2025, what is the taxable prices for lease of assets in Vietnam? (Image from the Internet)

When is a person leasing out asset exempted from VAT and PIT payment in Vietnam?

Circumstances where an individual leasing asset is exempt from VAT and PIT payment are stipulated in point c, clause 1, Article 9 of Circular 40/2021/TT-BTC (amended by clause 3, Article 1 of Circular 100/2021/TT-BTC) as follows:

Tax Calculation Methods for Specific Cases

1. Individuals Leasing asset

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b) Individuals leasing asset declare tax for each payment period (determined by the start time of each lease payment period) or declare tax annually by calendar year. Individuals may declare tax per contract or for multiple contracts on one declaration form if the assets leased are under the same tax authority management.

c) Individuals who solely lease asset without continuous operation throughout the year and have rental revenue of 100 million VND/year or less are not subject to VAT or personal income tax. In cases where lessees pay rent in advance for multiple years, the revenue to determine tax liability is the one-time payment allocated by calendar year.

Thus, individuals leasing asset do not have to pay personal income tax or VAT if:

- The individual only leases asset without continuous operation for the entire year;- Rental revenue does not exceed 100 million VND per year.

Note: If personal income tax and VAT must be paid, the individual leasing asset declares tax for each arising payment period or annually by calendar year. They may declare tax per contract or for multiple contracts on one declaration form if the leased asset is under the same tax authority management.

How does a lessor pay tax if the lessee pays upfront rent for multiple years in Vietnam?

According to point d, clause 1, Article 9 of Circular 40/2021/TT-BTC, it is stipulated as follows:

Tax Calculation Methods for Specific Cases

1. Individuals Leasing asset

...

d) If the lessee pays rent upfront for multiple years, the individual leasing asset declares and pays tax in a lump sum for the entire upfront revenue. The lump sum tax obligation is the total tax payable for each calendar year as prescribed. In cases where there are changes in the lease contract's terms affecting taxable revenue, payment period, or lease term, the individual must adjust and supplement declarations according to the Tax Administration Law for the tax period with changes.

Thus, if the lessee pays rent upfront for multiple years, the individual leasing asset declares and pays a lump sum tax for the full upfront revenue. The lump sum tax obligation is the total tax payable for each calendar year as prescribed.

Note: If there are changes in the lease contract terms that affect taxable revenue, payment period, or lease term, the individual must adjust and supplement the tax declaration according to the Tax Administration Law 2019 for the affected tax period.