How to calculate personal income tax on the disposition of land-use right in Vietnam in 2025?

How to calculate personal income tax on the disposition of land-use right in Vietnam in 2025?

* Calculation of Personal Income Tax for Resident Individuals Transferring Land Use Rights:

Where:

[1] Taxable Income:

Based on the provisions in Clause 2, Article 21 of the 2007 Personal Income Tax Law, taxable income from the disposition of land-use right is the taxable income stipulated in Article 14 of the 2007 Personal Income Tax Law, as amended by Clause 6, Article 2 of the 2014 Law on Amendments and Supplements to a Number of Articles of the Tax Laws and Article 247 of the 2024 Land Law.

According to the regulations in Article 14 of the 2007 Personal Income Tax Law, amended by Clause 6, Article 2 of the 2014 Law on Amendments and Supplements to a Number of Articles of the Tax Laws and Article 247 of the 2024 Land Law, in cases of land use rights transfer, the taxable income is calculated based on the land price in the land price list.

[2] Tax Rate:

Based on the provisions in Clause 2, Article 12 of Circular 111/2013/TT-BTC, as amended by Article 17 of Circular 92/2015/TT-BTC, the tax rate is 2% on the transfer price.

* Calculation of Personal Income Tax for Non-Resident Individuals Transferring Land Use Rights:

Based on the provisions in Clause 1, Article 21 of Circular 111/2013/TT-BTC on the calculation of personal income tax as follows:

Where:

[1] Transfer Price is the total amount received by the individual from the disposition of land-use right without deduction of any expenses including cost price.

Note: The transfer price of land use rights for non-resident individuals in each specific case is determined in the same manner as determining the transfer price of land use rights for resident individuals as guided in points a and b, Clause 1, Article 12 of Circular 111/2013/TT-BTC, as amended by Article 17 of Circular 92/2015/TT-BTC, specifically:

- The transfer price for transferring land use rights without buildings on the land is the price stated in the transfer contract at the time of transfer.

In cases where the transfer contract does not specify a price or the price in the transfer contract is lower than the land price regulated by the Provincial People's Committee at the time of transfer, the transfer price is determined according to the land price list specified by the Provincial People's Committee at the time of transfer.

- The transfer price for transferring land use rights associated with buildings on the land, including houses and future constructions, is the price stated in the transfer contract at the time of transfer.

In cases where the transfer contract does not specify a land price or the land price in the transfer contract is lower than the price regulated by the Provincial People's Committee, the land transfer price is the price regulated by the Provincial People's Committee at the time of transfer according to the law on land.

[2] The tax rate is 2%

How to calculate personal income tax on the disposition of land-use right in Vietnam in 2025? (Image from the Internet)

When is the time to calculate personal income tax on the disposition of land-use right in Vietnam?

* For Non-Resident Individuals:

Based on the provisions in Clause 3, Article 12 of Circular 111/2013/TT-BTC, as amended by Article 17 of Circular 92/2015/TT-BTC, the timing for tax calculation is determined as follows:

- In case the transfer contract does not have an agreement that the buyer is responsible for paying tax on behalf of the seller, the time for tax calculation is the effective time of the transfer contract according to legal regulations;

- In case the transfer contract includes an agreement that the buyer is responsible for paying tax on behalf of the seller, the time for tax calculation is the time of registration procedures for the ownership and use rights of real estate.

In cases where an individual receives the disposition of land-use right associated with future constructions, the time for tax calculation is when the individual submits the tax declaration file to the tax authority.

* For Non-Resident Individuals:

Based on the provisions in Clause 3, Article 21 of Circular 111/2013/TT-BTC, the tax calculation time is when a non-resident individual performs the transfer procedures according to legal regulations.

What are cases where the disposition of land-use right is not allowed in Vietnam?

Based on the provisions in Clause 8, Article 45 of the 2024 Land Law regarding cases where the disposition of land-use right is not allowed as follows:

(1) Economic organizations are not allowed to acquire the transfer of protective forest land and special-use forest land from individuals, except for cases where the purpose of land use change has been approved in the land use plan by a competent authority;

(2) Individuals who do not reside in the area of protective forests and special-use forests are not allowed to acquire the transfer of homestead land use rights and other land in the protective forest areas, within the strict protection sub-zones, and ecological recovery sub-zones of those special-use forests;

(3) Organizations, individuals, residential communities, religious organizations, affiliated religious organizations, overseas Vietnamese, and foreign-invested economic organizations who are not permitted by law are not allowed to acquire the disposition of land-use right.