What are the 03 types of taxes applied to annual housing rental income of over 100 million VND in Vietnam?

What are the 03 types of taxes applied to annual housing rental income of over 100 million VND in Vietnam?

Based on the regulations in Article 4 of Circular 40/2021/TT-BTC, the principles for tax calculation on revenue from house rental activities are stipulated as follows:

Tax Calculation Principles

1. Tax calculation principles for business households and individuals engaged in business activities are implemented according to the current legal regulations concerning VAT and personal income tax (PIT), as well as other relevant legal documents.

2. Business households or individuals with an annual calendar revenue from production or business activities up to 100 million VND are not required to pay VAT and PIT as per the legal provisions on VAT and PIT. Business households or individuals have the responsibility to declare taxes accurately, honestly, fully, and submit tax documents on time; being responsible before the law for the accuracy, honesty, and completeness of the tax documents as prescribed.

3. For business households and individuals in the form of a group of individuals or families, the revenue level capped at 100 million VND per year for determining the exemption from VAT and PIT is allocated to a single representative of the group of individuals or family for the tax year.

If your rental revenue exceeds 100 million VND in a year, you will be required to pay personal income tax (PIT) and value-added tax (VAT).

[1] VAT on Rental Revenue for Individuals, Groups, or Families Exceeding 100 Million VND in One Year

According to Clause 3, Article 10 of Circular 40/2021/TT-BTC, house rental activities are subject to VAT under these conditions:

- Revenue under 100 million VND/year:

If the rental revenue is under 100 million VND within a calendar year, individuals or families are not required to pay VAT.

- Revenue over 100 million VND/year:

If rental revenue exceeds 100 million VND in a year, individuals or families must declare and pay VAT at 5% of the taxable rental revenue.

[2] Personal Income Tax (PIT) on Rental Revenue for Individuals, Groups, or Families Exceeding 100 Million VND in One Year

According to Clause 3, Article 10 of Circular 40/2021/TT-BTC, the PIT rate on rental revenue exceeding 100 million VND/year is 5%.

- Revenue under 100 million VND/year:

If the rental revenue is under 100 million VND within a calendar year, individuals or families are not required to pay PIT.

- Revenue over 100 million VND/year:

If rental revenue exceeds 100 million VND in a year, individuals or families must pay PIT at 5% of the taxable rental revenue.

[3] License Fee on Rental Activities for Individuals, Groups, or Families is Regulated as Follows:

- Revenue under 100 million VND/year:

Individuals, groups, or families are exempt from the license fee.

- Revenue over 100 million VND/year:

Individuals, groups, or families must pay a license fee based on the rental revenue. Specifically:

+ Revenue over 500 million VND/year: Must pay 1 million VND/year.

+ Revenue from 300 million to 500 million VND/year: Must pay 500 thousand VND/year.

+ Revenue from 100 million to 300 million VND/year: Must pay 300 thousand VND/year.

According to point d clause 2 Article 4 of Decree 139/2016/ND-CP supplemented by point a clause 2 Article 1 of Decree 22/2020/ND-CP.

Thus, based on the regulations above, rental revenue over 100 million in a year is subject to 02 types of taxes: PIT, VAT, and the license fee.

What are the 03 types of taxes applied to annual housing rental income of over 100 million VND in Vietnam? (Image from the Internet)

What is the tax declaration form for housing rental in Vietnam?

Based on Section 7, Appendix 2 issued with Circular 40/2021/TT-BTC, the tax declaration form for individuals renting houses who directly declare tax with the tax authorities is Form 01/TTS as follows:

Tax Declaration Form for House Rental....Download

Note: The above tax declaration form is only applicable for individuals renting houses who declare tax directly with the tax authority.

What are penalties for failing to pay or late payment of taxes applied to annual housing rental income of over 100 million VND in Vietnam?

According to the provisions of Article 13 of Decree 125/2020/ND-CP regarding penalties for infractions relating to the timing of tax filing as follows:

- Warning penalties for late tax filing from 01 to 05 days with mitigating circumstances.

- Fines from 2,000,000 VND to 5,000,000 VND for late tax filing from 01 to 30 days, except as specified in clause 1 of this Article.

- Fines from 5,000,000 VND to 8,000,000 VND for late tax filing from 31 to 60 days.

- Fines from 8,000,000 VND to 15,000,000 VND for any of the following actions:

+ Filing tax returns beyond 61 to 90 days late;

+ Filing tax returns beyond 91 days late without any payable tax arising;

+ Not submitting tax returns without any payable tax arising;

+ Not submitting appendices as prescribed in tax management for enterprises with associated transactions along with final tax settlement records.

- Fines from 15,000,000 VND to 25,000,000 VND for late tax filing over 90 days from the deadline, with arising payable tax, and the taxpayer has fully paid the tax amount, late payment fees into the state budget before the tax authority announces the decision on tax inspection or before the tax authority compiles a report on the act of late tax filing according to clause 11 Article 143 of the Law on Tax Administration.

Note: The above penalty rates apply to organizations. The penalty rate for individuals will be 1/2 of the organization’s penalty rate.