When must individuals leasing out their houses declare personal income tax in Vietnam?

When must individuals leasing out their houses declare personal income tax in Vietnam?

According to Article 9 of Circular 40/2021/TT-BTC, it is stipulated:

Tax Calculation Method for Certain Special Cases

1. Individuals leasing out assets

a) Individuals leasing out assets are individuals who generate revenue from leasing assets, including: leasing out houses, premises, stores, factories, warehouses not including accommodation services; leasing out transportation vehicles, machinery and equipment without an operator; leasing out other assets without accompanying services. Accommodation services not counted as asset leasing activities under this guidance include: providing short-term lodging to tourists and other transient visitors; providing long-term accommodations not as apartments for students, workers, and similar subjects; providing lodging along with dining services or entertainment facilities.

b) Individuals leasing out assets declare tax for each occurrence of payment (each payment period occurrence is determined according to the beginning of the leasing period of each payment period) or declare tax according to the calendar year. Individuals declare taxes for each contract or for multiple contracts on one declaration form if assets are rented out within the jurisdiction of the same tax authority.

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Accordingly, individuals generating revenue from leasing out houses can choose to declare PIT annually or for each occurrence of payment (each payment period occurrence is determined according to the beginning of the leasing period of each payment period).

When must individuals leasing out their houses declare personal income tax in Vietnam? (Image from Internet)

What are cases of PIT payment exemption for individuals leasing out their houses in Vietnam?

Based on clause 2, Article 9 of Circular 40/2021/TT-BTC (as amended by clause 3, Article 1 of Circular 100/2021/TT-BTC), it is stipulated:

Tax Calculation Method for Certain Special Cases

1. Individuals leasing out assets

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c) Individuals who only have asset leasing activities for part of the year and generate leasing revenue of 100 million VND/year or less, do not have to pay VAT or PIT. In cases where the lessee pays rent for multiple years in advance, the revenue threshold for determining whether the individual has to pay tax or not is based on the one-time payment revenue allocated according to the calendar year.

Thus, individuals leasing out do not have to pay VAT or PIT when meeting the following conditions:

- Leasing is not for the full year.

- Income generated from leasing out houses is under 100 million VND/year.

For cases where the lessee pays rent in advance for multiple years, the revenue threshold for determining whether the individual has to pay tax or not is based on the one-time payment revenue allocated according to the calendar year.

How do individuals leasing out their houses directly declare PIT with the tax authority in Vietnam?

For individuals leasing out their houses who directly declare personal income tax with the tax authority, tax declaration is carried out according to Article 14 of Circular 40/2021/TT-BTC, specifically:

(1) Tax declaration documentation

Tax declaration documentation for individuals directly declaring tax with the tax authority for asset leasing includes:

- Tax declaration form for asset leasing activities (applicable to individuals directly declaring tax with the tax authority for asset leasing activities and organizations declaring on behalf of individuals) as per form number 01/TTS issued with this Circular;

- Annex detailing the lease contracts (applicable to individuals directly declaring tax with the tax authority for asset leasing activities if it is the first tax declaration for the Contract or Contract Annex) as per form number 01-1/BK-TTS issued with this Circular;

- Copy of the asset lease contract, contract annex (if it is the first tax declaration for the Contract or Contract Annex);

- Copy of the Power of Attorney as per legal regulations (in the case where the individual leasing the asset authorizes a legal representative to perform tax declaration and payment procedures).

The tax authority has the right to request the original documents to verify the accuracy of the copies against the originals.

(2) Place to submit tax declaration documentation

The place to submit tax declaration documentation for individuals directly declaring tax with the tax authority is specified under clause 1, Article 45 of the Law on Tax Administration 2019. Specifically:

- Individuals with income from leasing out assets (excluding real estate in Vietnam) submit tax declaration documentation at the Tax Department directly managing the individual's place of residence.

- Individuals with income from leasing out real estate in Vietnam submit tax declaration documentation at the Tax Department directly managing the location of the rented real estate.

(3) Deadline for submitting tax declaration documentation

The deadline for submitting tax declaration documentation for individuals directly declaring tax with the tax authority follows the provisions of point a, clause 2, and clause 3, Article 44 of the Law on Tax Administration. Specifically:

- The deadline for submitting tax declaration documentation for individuals declaring tax for each occurrence of payment is no later than the 10th day from the start date of the leasing period for the payment period.

- The deadline for submitting tax declaration documentation for individuals declaring tax annually is no later than the last day of the first month of the subsequent calendar year.

(4) Tax payment deadline

The tax payment deadline for individuals directly declaring tax with the tax authority follows the provisions of clause 1, Article 55 of the Law on Tax Administration 2019, specifically:

- The tax payment deadline is no later than the last day of the deadline for submitting the tax declaration documentation.

- In the case of amending the tax declaration documentation, the tax payment deadline is the deadline for submitting the tax declaration documentation of the tax period with errors or omissions.