Is income from the transfer of land lease rights subject to personal income tax in Vietnam?

Is income from the transfer of land lease rights subject to personal income tax in Vietnam?

Based on Clause 5, Article 3 of the Personal Income Tax Law 2007, as amended by Clause 1, Article 1 of the Amended Personal Income Tax Law 2012, specifies taxable income as follows:

Taxable Income

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4. Income from the transfer of capital, including:

a) Income from transferring capital portions in economic organizations;

b) Income from transferring securities;

c) Income from transferring capital in other forms.

5. Income from real estate transfer, including:

a) Income from transferring land use rights and assets attached to land;

b) Income from transferring ownership or use rights of housing;

c) Income from transferring land lease rights, water surface lease rights;

d) Other incomes received from real estate transfer in any form."

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Thus, according to the above regulation, income from the transfer of land lease rights is subject to personal income tax.

Is income from the transfer of land lease rights subject to personal income tax in Vietnam? (Image from Internet)

What are regulations on the personal income tax period in Vietnam?

According to Article 7 of the Personal Income Tax Law 2007 as amended by Clause 3, Article 1 of the Amended Personal Income Tax Law 2012 about the tax period, stipulates as follows:

- The tax period for a resident individual is regulated as follows:

+ Annual tax period applies to income from business activities; income from wages and salaries;

+ Per occurrence tax period applies to income from capital investment; income from capital transfer, except income from securities transfer; income from real estate transfer; income from winnings; income from copyrights; income from franchise; income from inheritance; income from gifts;

+ Tax period per each transfer or annually for income from securities transfer.

- The tax period for a non-resident individual is calculated per occurrence of income generation applicable to all taxable income.

What income is exempt from personal income tax in Vietnam?

According to Article 4 of the Personal Income Tax Law 2007 as supplemented by Clause 3, Article 2 of the Amendment to Laws on Tax 2014 and amended by Clause 2, Article 1 of the Amended Personal Income Tax Law 2012 specifies exempt personal income as follows:

- Income from real estate transfer between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; grandparents and grandchildren; siblings with each other.

- Income from transferring residential houses, homestead land use rights, and assets attached to homestead land of individuals in cases where individuals own only one residential house or homestead land.

- Income from the value of land use rights of individuals upon state allocation.

- Income from inheritance, gifts as real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; grandparents and grandchildren; siblings with each other.

- Income of households, individuals directly engaging in agricultural, forestry production, salt making, aquaculture and fishing that have not undergone processing into other products or only undergone simple preliminary processing.

- Income from conversion of agricultural land allocated by the State to households, individuals for production.

- Income from interest on deposits at credit institutions, interest from life insurance contracts.

- Income from remittances.

- Night-work or overtime salary wage paid higher than day-work or regulated working hour wages.

- Pension income paid by the Social Insurance Fund; monthly pensions paid by the voluntary pension fund.

- Income from scholarships, including:

+ Scholarships received from the state budget;

+ Scholarships received from both domestic and international organizations under such organizations' educational encouragement programs.

- Income from life and non-life insurance contract compensation, compensation for labor accident, state compensation, and other compensations as prescribed by law.

- Income received from charity funds authorized or recognized by competent state agencies operating for charitable and humanitarian purposes, not for profit.

- Income received from foreign aid for charitable, humanitarian purposes in the form of government and non-government approved by relevant state agencies.

- Income from wages and salaries of Vietnamese sailors working for foreign shipping lines or Vietnamese shipping lines operating international transportation.

- Income of individual shipowners, individuals with ship-use rights, and individuals working on ships from direct supply of goods and services for offshore fishing and fishing operations.