Which authority handles the procedure for exemption from personal income tax on real estate transfers in Vietnam?

Which authority handles the procedure for exemption from personal income tax on real estate transfers in Vietnam?

According to Section 4 of Part 2 of the Appendix issued with Decision 2780/QD-BTC in 2023 regarding administrative procedures amended and supplemented in the field of Taxation under the management of the Ministry of Finance, the procedure for declaring exemption from personal income tax for individuals with income from transferring, inheriting, or receiving gifts of real estate, is as follows:

Declaration of exemption from personal income tax for individuals with income from transferring, inheriting, or receiving gifts of real estate (including future housing and construction projects)

- Steps to be undertaken:

+ Step 1: An individual transferring real estate that is exempt from tax (including future housing and construction projects) prepares the dossier and submits the tax exemption dossier along with the tax return as stipulated at the single-window department or Tax Branch where the real estate is located. In localities where the single-window regulation has not yet been implemented, the dossier is submitted directly to the land use rights registration office where the transfer of real estate is located.

In case an individual transfers future housing or construction projects, tax declaration and personal income tax payment are made at the local Tax Branch where the future housing or construction project is located.

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- Administrative procedure authority: Tax Branch.

Thus, the authority that resolves the exemption from personal income tax procedure on real estate transfers is the Tax Branch where the real estate is located.

Which authority handles the procedure for exemption from personal income tax on real estate transfers in Vietnam? (Image from the Internet)

What is the procedure to follow for exemption from personal income tax due to real estate transfers in Vietnam?

According to Section 4 of Part 2 of the Appendix issued with Decision 2780/QD-BTC in 2023, the procedure for exemption from personal income tax due to real estate transfers is as follows:

Step 1: Submit the dossier

- Individuals transferring real estate that is exempt from tax (including future housing and construction projects) prepare the dossier and submit it along with the tax return as regulated at the single-window department or Tax Branch where the real estate is located. In localities where the single-window regulation has not been implemented, the dossier should be submitted directly to the land use rights registration office where the real estate transfer is located.

In cases where individuals transfer future housing or construction projects, tax declaration and personal income tax payment are performed at the local Tax Branch where the future housing or construction project is located.

Step 2: The tax authority receives the dossier:

- In cases where the dossier is submitted directly to the tax authority or by post: the tax authority receives, processes, and resolves the dossier as per regulations.

- In cases where the dossier is submitted to the tax authority through electronic transactions, acceptance, review, processing, and returning results are done via the tax authority's electronic data processing system.

For cases involving transfer, inheritance, or gifts of real estate (including future housing, construction projects, projects handed over but not yet issued land use rights certificates, ownership of housing and assets attached to the land as per housing and real estate business laws) between spouses, biological parents and children, adoptive parents and adopted children; parents-in-law with daughter-in-law; parents-in-law with son-in-law; grandparents and grandchildren; siblings.

The tax authority is responsible for utilizing information in the National Population Database as regulated in Article 84 of Circular 80/2021/TT-BTC (amended and supplemented by Circular 43/2023/TT-BTC) to resolve tax exemption procedures for taxpayers.

In cases where it is not possible to utilize residence information of citizens in the National Population Database, taxpayers must provide documents related to determining the exempted subjects on a case-by-case basis.

Step 3: The tax authority reviews the dossier and returns results as per regulations.

What income is exempt from personal income tax on real estate transfers in Vietnam?

According to Article 4 of Personal Income Tax Law 2007 supplemented by Clause 3 Article 2 of Law amending various Tax Laws 2014, amended by Clause 2 Article 1 of Amended Personal Income Tax Law 2012, five types of income are exempt from personal income tax as follows:

(1) Income from real estate transfers between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughter-in-law; parents-in-law and son-in-law; grandparents and grandchildren; siblings.

(2) Income from transfers of housing, rights to use homestead land, and assets attached to homestead land of individuals who have only one house or homestead land.

(3) Income from the value of land use rights allocated by the State to individuals.

(4) Income from inheritance and gifts of real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughter-in-law; parents-in-law and son-in-law; grandparents and grandchildren; siblings.

(5) Income from converting agricultural land of households and individuals allocated by the State for production purposes.