Is revenue from leasing out housing taxable in Vietnam? How much is licensing fee for revenue from leasing out housing in Vietnam?

Is revenue from leasing out housing taxable in Vietnam?

Based on Clause 2, Article 4 of Circular 40/2021/TT-BTC stipulating the principles of tax calculation as follows:

Principles of Tax Calculation

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2. Business households and individuals with annual revenue from production and business activities not exceeding VND 100 million are not subject to VAT and PIT as per the provisions of VAT law and PIT law. Business households and individuals are responsible for accurately, truthfully, and fully declaring taxes and submitting tax documents on time; they are accountable before the law for the accuracy, truthfulness, and completeness of the tax documents as regulated.

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According to point c, clause 1, Article 9 of Circular 40/2021/TT-BTC (amended by Clause 3, Article 1 of Circular 100/2021/TT-BTC) regulating the tax calculation method for individuals leasing property:

Method of Tax Calculation for Specific Cases

1. Individuals leasing property

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c) Individuals who solely lease property and the leasing period is not throughout the year. If the rental income is from VND 100 million/year or less, they are not required to pay VAT or PIT. If the lessee pays rent in advance for several years, the revenue to determine whether the individual has to pay tax or not is the lump sum revenue apportioned annually.

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Accordingly, revenue from leasing out housing income will result in obligations to pay VAT and PIT.

Based on the above regulations, in principle, individuals with annual business revenue from production and business activities of VND 100 million or less are not required to pay VAT and PIT under the legal provisions for VAT and PIT.

For individuals solely engaging in property rental, if the rental income does not exceed VND 100 million/year, they are not subject to VAT or PIT as per the regulations.

Is revenue from leasing out housing taxable in Vietnam? How much is licensing fee for revenue from leasing out housing in Vietnam? (Image from the Internet)

How much is the licensing fee for revenue from leasing out housing in Vietnam?

According to Article 3 of Decree 139/2016/ND-CP, individuals, groups of individuals, and households with annual business revenue not exceeding VND 100 million are exempt from licensing fee.

Based on Article 4 of Circular 302/2016/TT-BTC, the annual revenue of VND 100 million or less, which qualifies an individual, group of individuals, or household for exemption from licensing fee, is the total revenue subject to PIT as per the regulations on PIT.

For revenue exceeding VND 100 million/year, the licensing fee rates are determined as follows:

- Revenue over VND 100 million to 300 million/year: VND 300,000/year;

- Revenue over VND 300 million to 500 million/year: VND 500,000/year;

- Revenue over VND 500 million/year: VND 1,000,000/year.

Thus, if the revenue from leasing out housing income is VND 100 million or less annually, there is no obligation to pay licensing fee. If liable, the maximum payable amount is VND 1,000,000/year.

What is the deadline for licensing fee payment in Vietnam?

According to Article 5 of Decree 139/2016/ND-CP:

Declaration and Payment of licensing fee

1. The declaration of licensing fee is executed as follows:

a) The licensing fee declaration is done once when the fee payer commences business activities, no later than the last day of the month in which business activities commence;

b) In case a newly established business has not yet commenced operations, the licensing fee declaration must be done within 30 days from the issuance date of the business registration certificate or the date of the investment registration certificate.

2. The licensing fee declaration document is a declaration form issued with this Decree.

3. The licensing fee declaration is submitted by the payer to the direct supervisory tax authority.

a) If the fee payer has a dependent unit (branch, representative office, business location) operating within the same provincial area, the payer submits the licensing fee declaration for those dependent units to the tax authority directly supervising the payer;

b) If the fee payer has a dependent unit operating in a different provincial area from where the payer's main office is located, the dependent unit submits the licensing fee declaration to the tax authority directly supervising the dependent unit.

4. The deadline for licensing fee payment is January 30 each year. For newly operating business ventures or newly established businesses, the deadline is the last day of the deadline for submission of the tax declaration.

5. The collected licensing fee must be fully submitted to the state budget as defined by law.

Therefore, the latest deadline for licensing fee payment is January 30 each year.

For new business operations or newly established entities, the deadline extends to the last day of the tax declaration submission deadline.