What are the methods for calculating land transfer tax in Vietnam?

What are the methods for calculating land transfer tax in Vietnam?

Based on point c, sub-section 1.2, Section 1 of Official Dispatch 17526/BTC-TCT in 2014, starting from January 1, 2015, a fixed tax rate of 2% is applied on each real estate transfer price in lieu of the previous two methods of tax calculation.

Tax rate: The tax rate for buying and selling houses and land is 2% on the buying, selling price, or sublease price.

Latest Method for Calculating Land Transfer Tax

- Personal income tax on income from buying and selling real estate is determined as follows:

- In the case of co-ownership of real estate, the tax obligation is determined separately for each taxpayer according to the ownership ratio. The basis for determining the ownership ratio is legal documents such as: initial capital contribution agreement, will, or court division decision, etc. If there are no legal documents, each taxpayer's obligation is determined by the average ratio.

What are the methods for calculating land transfer tax in Vietnam? (Image from Internet)

Where is the place for submitting personal income tax declarations in Vietnam?

According to Article 45 of the Law on Tax Administration 2019, specific regulations on the place for submitting tax declarations are as follows:

- Taxpayers submit tax declarations at the tax authority directly managing them.

- If the tax declaration is submitted through a one-stop-shop mechanism, the location for submitting the tax declaration follows the regulations of that mechanism.

- The location for submitting tax declarations for exported and imported goods follows the provisions of the Customs Law.

- The Government of Vietnam specifies the place for submitting tax declarations in the following cases:

+ Taxpayers having multiple production, business activities;

+ Taxpayers conducting production, business activities in multiple areas; having tax obligations arising for taxes declared and paid upon each occurrence;

+ Taxpayers having tax obligations related to land revenue; water resources mining, mineral resources concessions;

+ Taxpayers having tax obligations for personal income tax finalization;

+ Taxpayers filing taxes via electronic transactions and other necessary cases.

What income is exempt from personal income tax in Vietnam?

According to Article 4 of the Personal Income Tax Law 2007, supplemented by Clause 3, Article 2 of the Law amending Laws on Taxation 2014, and Clause 10 amended by Clause 2, Article 1 of the Amended Personal Income Tax Law 2012, specific regulations on tax-exempt income include:

- Income from real estate transfers between spouses; biological parents to biological children; adoptive parents to adopted children; parents-in-law to daughter-in-law; parents-in-law to son-in-law; paternal grandparents to grandchildren; maternal grandparents to grandchildren; siblings with each other.

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

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

- Income from inheritance, gifts as real estate between spouses; biological parents to biological children; adoptive parents to adopted children; parents-in-law to daughter-in-law; parents-in-law to son-in-law; paternal grandparents to grandchildren; maternal grandparents to grandchildren; siblings with each other.

Income of households, individuals directly engaged in agricultural, forestry production, salt making, aquaculture, seafood catching not through processing into other products or only through simple preliminary processing.

- Income from converting agricultural land of households, individuals assigned by the State for production.

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

- Income from remittances.

- Night shift, overtime wages paid higher than daytime working hours, working within legal working hours as prescribed by law.

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

- Income from scholarships, including:

+ Scholarships from the state budget;

+ Scholarships from domestic and foreign organizations under their sponsorship program.

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

- Income received from charitable funds permitted or recognized by competent state agencies, operating for charitable, humanitarian, non-profit purposes.

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

- Income from wages, salaries of Vietnamese seafarers working for foreign shipping companies or Vietnamese shipping companies in international transport.

- Income of individuals who are ship owners, individuals having the right to use the ship and individuals working on the ship from providing goods and services directly serving offshore fishing, catching activities.