General Department of Taxation of Vietnam clarifies 03 tax issues when implementing the Land Law 2024?

General Department of Taxation of Vietnam clarifies 03 tax issues when implementing the Land Law 2024?

On February 13, 2025, the General Department of Taxation received Official Dispatch 20682/CTBRV-2024 from the Tax Department of Ba Ria - Vung Tau Province regarding issues related to land prices when implementing the Land Law 2024 from August 1, 2024.

In response to the tax issues arising from the application of the Land Law 2024, the General Department of Taxation provided explanations through Official Dispatch 570/TCT-CS 2025 with the following opinions:

(1) Issue in Determining the Tax Basis for Real Estate Transfers

Regarding the determination of the tax base for real estate transfers, the General Department of Taxation has issued Official Dispatch 299/TCT-CS 2025 to guide the Tax Departments of provinces and centrally-run cities (photocopy attached). Specifically:

- In the case of households and individuals transferring land use rights (without attached assets), the taxable income for personal income tax is calculated based on the land price listed in the land price table.

- In the case of households and individuals transferring real estate (land use rights and attached assets), the taxable income for personal income tax is determined by the transfer price at each occurrence, as stipulated by current personal income tax laws (Law on Personal Income Tax 2007, Decree 12/2015/ND-CP, Circular 92/2015/TT-BTC).

Furthermore, the Land Law 2024 makes no amendments to registration fees. The current policies regarding registration fees are implemented according to Decree No. 10/2022/ND-CP of the Government of Vietnam on registration fees.

(2) Issue in Determining Land Levy When Paying Overdue Debt with Recorded Debt

- For cases where households or individuals had land levy debt recorded on the Certificate before December 10, 2019, but have not fully paid land levy debt by August 1, 2024, they must pay the remaining land levy according to the policies and land prices at the time of repayment (applicable to cases overdue for 5 years).

The Tax Authority is responsible for reviewing the cases with recorded debt that have not been paid by the deadline to notify those with land levy debt regarding the recording and payment of debts. The state budget collection agency, according to tax management law, is responsible for collecting the outstanding land levy according to the amount recorded on the Certificate or the Tax Authority’s Notification.

- For cases overdue for 5 years, when the land user comes to settle the debt, the land levy payable to complete financial obligations with the state budget (debt repayment) is determined according to the collection policy and land price at the time of repayment.

(3) Issue in Calculating Land Levy When Recognizing Land Use Rights

Articles 9, 10, 11, 12 of Decree 103/2024/ND-CP specify cases concerning the calculation of land levy when issuing Certificates.

For land use right recognition records submitted before August 1, 2024, starting from August 1, 2024 (the effective date of the Land Law 2024 and Decree 103/2024/ND-CP), if the tax authority issues a tax notice, the land price and collection policies are implemented according to Decree 103/2024/ND-CP.

>>>See more: In which cases is land use purpose change exempted from land levy?

General Department of Taxation of Vietnam clarifies 03 tax issues when implementing the Land Law 2024? (Image from the Internet)

Which income from real estate transfers is subject to personal income tax in Vietnam?

Based on Clause 5, Article 2 of Circular 111/2013/TT-BTC, personal income subject to tax from real estate transfer includes income received from real estate transactions, including:

- Income from the transfer of land use rights.

- Income from the transfer of land use rights and assets attached thereto.

Assets attached to the land include:

+ Houses, including future formed houses;

+ Infrastructure and construction works attached to the land, including future formed constructions;

+ Other assets attached to the land, including agricultural, forestry, and fishery products (such as plants, animals).

- Income from the transfer of house ownership, including future formed houses.

Houses, constructions formed in the future are under construction and have not yet been accepted for use.

- Income from the transfer of land lease rights, water surface lease rights.

- Income from capital contributions with real estate to establish enterprises or increase business capital according to the law.

- Income from authorizing the management of real estate where the authorized person can transfer real estate or have rights equivalent to the property owner as per the law.

- Other real estate transfer-related income regardless of the form.

How to calculate personal income tax on real estate transfers in Vietnam?

Based on Article 12 of Circular 111/2013/TT-BTC (amended by Article 17 of Circular 92/2015/TT-BTC) and Clause 1, Article 21 of Circular 111/2013/TT-BTC, personal income tax from real estate transfers is calculated as follows:

(1) For Resident Individuals

In which:

- The real estate transfer price is determined as follows:

+ The transfer price for transferring land use rights without constructions; transferring land use rights with constructions (including future formed houses, constructions) is the price recorded in the transfer contract at the time of transfer.

++ In case of transferring houses attached to land, the value of the house, infrastructure, and architectural works attached to the land is determined based on the house registration fee valuation by the provincial People's Committee. If the provincial People's Committee does not regulate house registration fee valuation, the regulations of the Ministry of Construction on house classification, construction standards, basic construction standards, and the actual remaining value of constructions on land apply.

++ For construction works formed in the future, if the contract does not record a transfer price or the transfer price is lower than the capital contribution ratio on the project value multiplied by land price and construction registration fee valuation by the provincial People's Committee, the transfer price is determined according to the Committee’s valuation multiplied by the contribution ratio on the project value. If the provincial People's Committee has no unit price regulation, the investment capital estimation for construction works by the Ministry of Construction, applicable at the time of transfer, applies.

Note: If the transfer contract does not record a land price or the land price in the transfer contract is lower than the price set by the provincial People's Committee at the transfer time, the land transfer price is the price set by the provincial People's Committee at the transfer time.

+ The transfer price for leasing land, water surface leasing rights is the price recorded in the contract at the time of the transfer of lease rights.

Note: If the sublease price in the contract is lower than the price set by the provincial People's Committee at the sublease time, the sublease price is determined based on the price set by the provincial People's Committee.

- The tax rate for real estate transfers is 2% of the transfer price or sublease price.

- The tax calculation time from real estate transfers is determined as follows:

+ If the transfer contract does not stipulate the buyer paying tax on behalf of the seller, the tax calculation time is when the transfer contract takes effect;

+ If the transfer contract stipulates the buyer paying tax on behalf of the seller, the tax calculation time is when performing procedures for registering ownership, and real estate use rights.

In the case of an individual acquiring a future house, rights to land attached to future construction, the tax declaration is submitted to the tax agency at the time of individual tax filing.

Note:

If the real estate transferred is co-owned, the tax obligation is determined individually for each taxpayer according to their ownership ratio of the real estate.

The ownership ratio is established by legal documents such as original capital contribution agreements, wills, or judicial division decisions,... If no legal documents exist, each taxpayer's tax obligation is determined on an average basis.

(2) For Non-Resident Individuals

According to Article 21 of Circular 111/2013/TT-BTC, personal income tax for non-residents’ income from real estate transfers in Vietnam is calculated as follows:

In which:

- The real estate transfer price for non-resident individuals: is the total amount received from the real estate transfer without deducting any costs, including capital costs.

The real estate transfer price for non-residents in each specific case is determined like that for resident individuals as guided in points a.1, b.1, c.1, d.1, Clause 1, Article 12 of Circular 111/2013/TT-BTC.

- The time to determine income from real estate transfers: is when the non-resident individual undertakes the legally defined real estate transfer procedures.