What taxes are applicable to incomes from real estate transfer in Vietnam in 2024?

What taxes are applicable to incomes from real estate transfer in Vietnam in 2024?

Real estate transfer tax includes various taxes payable when transferring real estate.

- Corporate Income Tax

Based on Clause 2, Article 3 of the Law on Corporate Income Tax 2008 amended and supplemented by Clause 2, Article 1 of the 2013 Amended Law on Corporate Income Tax, and Clause 1, Article 1 of Law No. 71/2014/QH13 on Amendments to Tax Laws 2014, income from the transfer of real estate is subject to corporate income tax.

- Personal Income Tax

According to Clause 5, Article 3 of the Law on Personal Income Tax 2007 amended by Clause 1, Article 1 of the 2012 Amended Law on Personal Income Tax, income from the transfer of real estate is taxable income for personal income tax purposes.

- Value Added Tax

According to Point h, Clause 1, Article 7 of the Law on Value Added Tax 2008, enterprises engaging in real estate business must pay value added tax except for the transfer of land use rights.

What taxes are applicable to incomes from real estate transfer in Vietnam in 2024? Image from the Internet

What are the tax rates for incomes from real estate transfer in Vietnam in 2024?

Corporate Income Tax (CIT)

Based on Article 10 of the Law on Corporate Income Tax 2008, amended and supplemented by Clause 6, Article 1 of the Amended Law on Corporate Income Tax 2013, the specific provisions are as follows:

- The corporate income tax rate is 22%, except for cases specified in Clauses 2 and 3 of Article 10 and special tax incentives as stated in Article 13 of the Law on Corporate Income Tax 2008.

- Cases subject to the 22% tax rate will switch to a 20% tax rate starting January 1, 2016.

- Enterprises with a total annual revenue not exceeding twenty billion VND are subject to a 20% tax rate.

- The corporate income tax rate for activities involving exploration and exploitation of oil, gas, and other precious resources in Vietnam ranges from 32% to 50%, depending on each project and business establishment.

CIT Calculation Formula

Personal Income Tax (PIT)

According to Article 23 of the Law on Personal Income Tax 2008, amended and supplemented by the 2014 Amended Tax Laws, the specific provisions are as follows:

- Personal income tax on the transfer of real estate is 2% on taxable income from the transfer.

- In cases where the purchase price or related costs cannot be determined, taxable income will be based on the transfer price.

Value Added Tax (VAT)

- The VAT applicable for real estate transfer is 10% as per Article 11 of Circular 219/2013/TT-BTC.

What are the penalties for late tax payment or failure to pay tax in Vietnam?

According to Article 13 of Decree 125/2020/ND-CP regulating penalties for violations regarding the timely submission of tax declarations:

- A warning is issued for tax declarations submitted 1 to 5 days late with mitigating circumstances.

- A fine from 2,000,000 VND to 5,000,000 VND for tax declarations submitted 1 to 30 days late, except as specified in Clause 1 of this Article.

- A fine from 5,000,000 VND to 8,000,000 VND for tax declarations submitted 31 to 60 days late.

- A fine from 8,000,000 VND to 15,000,000 VND for:

+ Submitting tax declarations 61 to 90 days late;

+ Submitting tax declarations over 91 days late without tax payable;

+ Not submitting tax declarations without tax payable;

+ Failing to submit appendices for management of enterprises with associated transactions along with corporate income tax finalization reports.

- A fine from 15,000,000 VND to 25,000,000 VND for tax declarations submitted over 90 days late, where tax is payable, and the taxpayer has fully paid the tax and late payment fees before the tax authority announces the decision to inspect or audit taxes, or before the tax authority issues a report on late tax declaration submission as prescribed in Clause 11, Article 143 of the Law on Tax Administration.

Note: The above penalties apply to organizations. Penalties for individuals are half that of individuals.

Where to submit tax declarations in Vietnam?

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

- Taxpayers submit tax declarations at the tax authority that manages them directly.

- When submitting tax declarations through a one-stop-shop mechanism, the location follows the regulations of that mechanism.

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

- the Government of Vietnam stipulates the locations for submitting declarations in the following cases:

+ Taxpayers have multiple production, business activities;

+ Taxpayers conduct business in multiple locations; taxpayers have obligations for taxes declared and paid per occurrence;

+ Taxpayers have obligations for taxes from land, rights to exploit water resources, mineral resources;

+ Taxpayers have obligations for personal income tax finalization;

+ Taxpayers file taxes through electronic transactions and other necessary cases.