Is inheriting a house from a grandfather subject to personal income tax in Vietnam?

Is inheriting a house from a grandfather subject to personal income tax in Vietnam?

Based on the regulations stipulated in Article 4 of the Law on Personal Income Tax 2007 (amended by Clause 2, Article 1 of the Law on Amendments to the Law on Personal Income Tax 2012 and supplemented by Clause 3, Article 2 of the Law on Amendments to Tax Laws 2014), income exempt from tax includes:

- Income from the transfer of real estate between husband and wife; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; father-in-law, mother-in-law, and son-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

- Income from the transfer of residential houses, homestead land use rights, and assets attached to the homestead land of an individual in case the individual owns only one residential house or homestead land.

- Income from the value of land use rights allocated by the State to individuals.

- Income from receiving inheritance or gifts as real estate between husband and wife; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; father-in-law, mother-in-law, and son-in-law; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings.

- Income of households and individuals directly engaged in agricultural, forestry, salt production, aquaculture, and fishing activities that have not been processed into other products or are only subject to simple processing.

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

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

- Income from remittances.

- Part of the salary paid for working at night or overtime that is higher than the salary for working during the day or regular hours as prescribed by law.

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

- Scholarship income, including:

+ Scholarships received from the state budget;

+ Scholarships received from domestic and foreign organizations under the educational promotion support programs of those organizations.

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

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

- Income from foreign donations for charitable and humanitarian purposes in the form of government and non-governmental aid approved by competent state agencies.

- Income from salaries and wages of Vietnamese seamen working for foreign shipping companies or Vietnamese shipping companies engaged in international transport.

- Income of individuals who are ship owners, or individuals with the right to use ships and work on ships, derived from providing goods and services directly serving offshore fishing and aquaculture activities.

According to the regulation, income from inheriting a house from a grandfather is exempt from Personal Income Tax (PIT).

Is inheriting a house from a grandfather subject to personal income tax in Vietnam? (Image from the Internet)

How to terminate taxable PIT income from inheriting a house in Vietnam?

Taxable PIT income from inheriting a house is determined following the guidelines of Article 23 of Decree 65/2013/ND-CP as follows:

- Taxable income from inheritance is the value of the inherited assets (real estate requiring registration of ownership and usage rights) that exceeds 10 million VND which the taxpayer receives each time it occurs.

- The determination of taxable income for inherited real estate assets must ensure suitability with the market prices at the time of income occurrence, in which:

+ The land value is based on the Land Price List prescribed by the provincial People's Committee at the time of receiving inheritance or gifts;

+ The value of houses, infrastructures, and architectural constructions attached to the land is determined according to the house registration fee price list prescribed by the provincial People's Committee. If the provincial People's Committee does not have regulations on house registration fee pricing, it is based on the Ministry of Construction’s regulations regarding house classification, standards, and basic construction norms; the actual remaining value of constructions on the land.

Is a grandchild inheriting a house from a grandfather exempt from registration fees in Vietnam?

Exemption from registration fees for inherited houses and land is regulated under Clause 10, Article 10 of Decree 10/2022/ND-CP as follows:

Article 10. Exemption from registration fees

...

10. Houses, land received as inheritance or gifts between: husband and wife; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; father-in-law, mother-in-law, and son-in-law*; paternal grandparents and grandchildren; maternal grandparents and grandchildren; siblings now being granted land use rights certificates, residential house ownership, and other assets attached to land by competent state agencies.*

...

Thus, in the case of inheriting a house from a grandfather, the registration fee is not required.