What are the cases where the tax authority shall impose the taxable revenue of landlords in Vietnam?

What do taxes to be paid by landlords in Vietnam include?

According to Clause 2, Article 4 of Circular 40/2021/TT-BTC:

Tax calculation rules

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2. A household business or individual business whose revenue from business operation in the calendar year is not exceeding 100 million VND shall not be required to pay VAT and PIT as prescribed by VAT and PIT laws. Household businesses and individual businesses shall declare tax truthfully and accurately; submit tax documents punctually; take legal responsibility for the accuracy, truthfulness and adequacy of the tax documents submitted.

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Point c, Clause 1, Article 9 of Circular 40/2021/TT-BTC (amended by Clause 3, Article 1 of Circular 100/2021/TT-BTC) states:

Tax calculation in some special cases

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c) In case an individual's only business operation is property lease, the lease duration is shorter than 1 year, and the revenue from property lease does not exceed VND 100 million per year, he/she is not required to pay VAT and PIT. In case the lessees pay the rent in advance for many years, the revenue as the basic to determine whether individuals must pay tax or not is the lump sum payment according to the calendar year.

According to the above regulations, landlords with an annual revenue exceeding VND 100 million must pay value-added tax (VAT) and personal income tax (PIT).

Note: If the landlord has annual revenue exceeding VND 100 million, he/she must also pay licensing fees according to Clause 2, Article 4 of Decree 139/2016/ND-CP.

What are the cases where the tax authority shall impose the taxable revenue of landlords in Vietnam? (Image from the Internet)

What are the cases where the tax authority shall impose the taxable revenue of landlords in Vietnam?

According to Clause 3, Article 5 of Circular 40/2021/TT-BTC:

Method and basis for calculating tax payable by household businesses and individual businesses under periodic declarations

1. Periodic declarations shall be prepared by large-scale household businesses and individual businesses or other household businesses and individual businesses that choose to pay tax under periodic declarations.

2. Household businesses and individual businesses paying tax under periodic declarations shall declare tax monthly, except new businesses and businesses that satisfy the criteria for declaring tax quarterly prescribed in Article 9 of Decree No. 126/2020/ND-CP.

3. If the revenue of a household business or individual business that is paying tax under periodic declarations is found to be false, the tax authority shall impose the taxable revenue as prescribed in Article 50 of the Law on Tax Administration.

4. Household businesses and individual businesses paying tax under periodic declarations shall comply with on accounting, invoices and documents. A household business or individual business is not required to do accounting if their a business line has the basis for determination of revenue which is confirmed by a competent authority,

5. Household businesses and individual businesses paying tax under periodic declarations are not required to finalize tax.

Thus, if a landlord paying VAT and PIT under periodic declarations is found to be false, the tax authority shall impose the taxable revenue as prescribed in Article 50 of the Tax Administration Law 2019.

Additionally, a landlord may be subject to tax liability imposition if in any of the cases stipulated in Article 14 of Decree 126/2020/ND-CP, including:

- Fails to apply for taxpayer registration.

- Fails to declare or truthfully and accurately declare tax.

- Fails to submit supplementary tax documents or adequate and accurate supplementary tax documents as the basis for determination of tax payable as requested by the tax authority.

- Fails to provide or truthfully and accurately provide information in accounting books as the basis for determination of tax obligations.

- Fails to present accounting books, invoices and documents necessary as the basis for tax calculation by the deadline or within the time limit for tax audit or tax inspection at the taxpayer’s premises.

- Fails to implement the decision on tax audit within 10 working days from the day on which the decision is signed, unless the inspection date is delayed as per regulations.

- Fails to implement the decision on tax inspection within 15 working days from the day on which the decision is signed, unless the inspection date is delayed as per regulations.

- Sells, buys, exchanges goods with unusual values; records unusual value of goods.

- Buys, exchanges goods, services using illegal invoices; illegally uses invoices for actual goods and services as discovered by an investigating or inspecting authority while revenues and expenses as the basis for tax calculation have been declared.

- Is suspected absconding or liquidating assets to avoid tax obligations.

- Conducts misleading or false transactions to reduce tax obligations.

- Fails to declare values of related-party transactions (if any) or fails to provide information about related-party transactions (if any) in accordance with tax administration regulations.

What are the procedures for tax liability imposition in Vietnam?

According to Article 16 of Decree 126/2020/ND-CP, procedures for tax liability imposition are as follows:

- When imposing tax liability, the tax authority shall send a written notice to the taxpayer and issue the tax liability imposition decision, which must specify the reasons and basis for imposition, the tax amount payable and payment deadline.

- In case the tax authority imposes tax liability through tax audit or tax inspection, the reasons and basis for imposition, the tax amount payable and payment deadline shall be written in the tax audit or tax inspection record and tax decision issued by the tax authority.

- In case tax liability is imposed due to the taxpayer’s violation, the tax authority shall impose administrative penalties and calculate late payment interest as prescribed by law.