What is the personal income tax rate on incomes from inheritance and gifts in Vietnam?

What is the personal income tax rate on incomes from inheritance and gifts in Vietnam?

Based on Clause 2, Article 16 of Circular 111/2013/TT-BTC which stipulates as follows:

Basis for calculating tax on incomes from inheritance and gifts

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2. Tax rate: The tax rate on incomes from inheritance and gifts is applied according to the fixed tax schedule at a rate of 10%.

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Thus, the tax rate on incomes from inheritance and gifts is applied according to the fixed tax schedule at a rate of 10%.

What is the personal income tax rate on incomes from inheritance and gifts in Vietnam? (Image from the Internet)

How to calculate personal income tax on incomes from inheritance and gifts in Vietnam?

Based on Clause 4, Article 16 of Circular 111/2013/TT-BTC, the method to calculate tax on incomes from inheritance and gifts is as follows:

* Where:

Taxable income from receiving inheritance and gifts is the portion of the asset value received as inheritance or gifts exceeding 10 million VND per receipt. The value of assets received as inheritance or gifts is determined for each case. To be specific:

- For inheritance and gifts in the form of securities: the value of the assets received as inheritance is the portion of the asset value received as inheritance or gifts exceeding 10 million VND calculated on all securities codes received without deducting any expenses at the time of registration of ownership transfer. To be specific, as follows:

+ 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 registering ownership of the securities.

+ For securities not falling under the above case: the value of the securities is based on the book value of the issuing company's accounts at the time of the nearest financial statement according to accounting laws prior to the time of registering ownership of the securities.

- For inheritance and gifts in the form of capital contributions in economic organizations and business establishments: the taxable income is the value of the capital contribution based on the book value of the company's accounts at the nearest time before registering ownership of the capital contribution.

- For inheritance and gifts in the form of real estate: the value of the real estate is determined as follows:

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

+ For real estate being houses and architectural works on the land, the value of the real estate is determined based on regulations by the competent State authority for classifying house values; regulations on standards, basic construction norms issued by competent State authorities; the remaining value of houses and architectural works at the time of registration of ownership.

In cases where the value cannot be determined following the above regulations, the value is based on the fee schedule issued by the Provincial People's Committee.

- For inheritance and gifts in the form of other assets that must be registered for ownership or use rights with a State management agency: the asset value is determined based on the table of fees issued by the Provincial People's Committee at the time the individual registers ownership, use rights of the inherited, gifted asset.

In cases where an individual receives inheritance or gifts in the form of imported assets, and the individual has to pay taxes related to the import of the assets, the value of the assets for personal income tax calculation for inheritance and gifts is the value based on the table of fees issued by the Provincial People's Committee at the time of registration of ownership minus (-) the import taxes paid by the individual.

How to declare personal income tax on incomes from inheritance and gifts in Vietnam?

Based on Clause 6, Article 26 of Circular 111/2013/TT-BTC, the declaration of personal income tax on incomes from inheritance and gifts is as follows:

- Individuals having income from inheritance and gifts declare tax for each occurrence even if the income is tax-exempt.

- State management agencies and related organizations only carry out procedures for transferring ownership, use rights of real estate, securities, capital contributions, and other assets requiring ownership or use rights registration for individuals receiving inheritance and gifts after having tax payment documents or tax authority confirmations that the income from inheritance and gifts in real estate is tax-exempt.