What incomes from inheritance Includes are taxable in Vietnam?

What incomes from inheritance Includes are taxable in Vietnam?

According to Clause 9, Article 2 of Circular 111/2013/TT-BTC, inherited income is the income a person receives under a will or according to the law on inheritance. For inherited real estate income, it includes:

- Right to use land;

- Right to use land with assets attached to it;

- Ownership of houses, including houses formed in the future;

- Infrastructure and construction works attached to land, including construction works formed in the future;

- Right to lease land;

- Right to lease water surfaces;

- Other types of income received from inheritance in any form; except income from inheritance.

What incomes from inheritance Includes are taxable in Vietnam? (Image from the Internet)

How to calculate personal income tax on incomes from inheritance for residents in Vietnam?

Based on Article 16 of Circular 111/2013/TT-BTC, amended by Article 19 of Circular 92/2015/TT-BTC, the calculation of personal income tax from inheritance for residents is as follows:

The formula to calculate personal income tax on incomes from inheritance for residents is as follows:

Personal Income Tax from Inheritance Payable = Taxable Income x 10% Tax Rate

Taxable income from inheritance is the value of the inherited property that exceeds 10 million VND each time it is received.

The value of the inherited property is determined case-by-case. To be specific:

- For inherited securities: the value of the inherited property is the value of the inherited property that exceeds 10 million VND calculated on the total code of securities received without deducting any costs at the time of registration of ownership transfer. Specifically:

+ For securities traded on the Stock Exchange: the value of the securities is based on the reference price on the Stock Exchange at the time of registration of securities ownership.

+ For securities not covered by the above case: the value of the securities is based on the book value of the issuing company at the nearest financial reporting period according to accounting laws before the time of registration of ownership of the securities.

- For inherited capital contributions in economic organizations, business establishments: the taxable income is the value of the capital contribution, which is determined based on the book value of the company at the nearest time before registering the ownership of the capital contribution.

- For inherited real estate assets: the value of the real estate is determined as follows:

+ For real estate being the value of land use rights, the value of land use rights is determined based on the Land Price Table issued by the Provincial People's Committee at the time the individual completes the procedures for registering the land use rights.

+ For real estate being houses and architectural constructions on land, the value of real estate is determined based on the regulations of the competent State management agency on house value classification; regulations on standards and basic construction rates issued by the competent State management authority; the remaining value of houses, architectural constructions at the time of registration for ownership.

If the above determination is not possible, the value shall be based on the pre-defined registration fee calculation value regulated by the Provincial People's Committee.

- For inherited assets that must be registered for ownership or use rights with the State management agency: the value of the asset is determined based on the pre-defined registration fee calculation value regulated by the Provincial People's Committee at the time the individual completes the procedures for registration of ownership or use rights of the inherited assets.

In case an individual inherits imported assets and must pay taxes related to the import of the assets, the value for calculating personal income tax from inheritance is the pre-defined registration fee calculation value regulated by the Provincial People's Committee at the time of registration for ownership or use rights, minus the taxes paid at the importation stage by the individual according to regulations.

- The time for determining taxable income from inheritance is when the individual completes the procedures for registering ownership or use rights of inherited or gifted assets.

What is the form of the personal income tax return for real estate transfer, inheritance, and gifts in Vietnam?

The Form 03/BDS-TNCN Personal Income Tax Return for real estate transfer, inheritance, and gifts is issued in Appendix 2 of Circular 80/2021/TT-BTC, and is as follows:

Download Form 03/BDS-TNCN: Here