Which entities are subject to tax on house rental in Vietnam in 2024? How to calculate house rental tax in 2024?

Which entities are subject to tax on house rental in Vietnam in 2024?

Based on Point c, Clause 1, Article 9 of Circular 40/2021/TT-BTC amended by Clause 3, Article 1 of Circular 100/2021/TT-BTC, the tax calculation method for individuals renting out assets is stipulated as follows:

Tax Calculation Method for Certain Specific Cases

1. Individuals renting out assets

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c) Individuals who only have rental activities and the rental period does not cover the whole year. If rental revenue does not exceed 100 million VND/year, they are not subject to VAT and personal income tax (PIT). If the lessee pays rental fees in advance for multiple years, the revenue to determine whether the individual is required to pay tax is the revenue paid as a lump sum allocated annually.

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Additionally, Article 4 of Circular 40/2021/TT-BTC specifically stipulates as follows:

Tax Calculation Principles

1. The principles for calculating tax for households and individual businesses are implemented according to current tax laws regarding VAT, PIT, and other related legal documents.

2. Households and individual businesses with revenue from production and business activities in a calendar year not exceeding 100 million VND are not required to pay VAT and PIT according to tax law regulations. They must truthfully, accurately, and fully declare their taxes and submit tax dossiers on time; they are responsible before the law for the accuracy, truthfulness, and completeness of their tax dossiers.

3. For households and individuals doing business as a group or family, the revenue threshold of 100 million VND/year to identify individuals who are not required to pay VAT and PIT is determined for the sole representative of the group or family in the tax year.

According to current law, individual businesses with revenue from production and business activities in a calendar year under 100 million VND do not have to pay VAT and PIT. Similarly, individuals renting out assets (including house rentals) with rental revenue not exceeding 100 million VND/year are also not required to pay VAT and PIT.

However, individuals renting out assets (house rental tax) with rental revenue exceeding 100 million VND/year must fulfill their tax obligations. In this case, individuals must accurately and fully declare taxes, submit tax dossiers on time, and take legal responsibility for related tax obligations.

Thus, the house rental tax 2024 applies to individuals renting out houses with revenue from rental activities exceeding 100 million VND/year.

Which entities are subject to tax on house rental in Vietnam in 2024? How to calculate house rental tax in 2024? (Image from the Internet)

How to calculate PIT on house rental in Vietnam in 2024?

The PIT payable when renting out houses is calculated using the following formula:

Where

- The tax rate (or PIT rate) applicable to individual businesses is as follows:

- Based on Clause 4, Article 2 of Law Amending Various Tax Laws 2014 and Appendix I issued with Circular No. 40/2021/TT-BTC

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

According to Article 13 of Decree 125/2020/ND-CP on penalties for violations regarding the tax declaration deadlines:

- A warning for submitting tax dossiers late from 1 day to 5 days with mitigating circumstances.

- A fine from 2,000,000 VND to 5,000,000 VND for submitting tax dossiers late from 1 day to 30 days, except for cases specified in Clause 1 of this Article.

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

- A fine from 8,000,000 VND to 15,000,000 VND for one of the following acts:

+ Submitting tax dossiers late from 61 to 90 days;

+ Submitting tax dossiers late from 91 days onward but no payable tax arises;

+ Not submitting tax dossiers but no payable tax arises;

+ Not submitting attachments as required for tax management for enterprises with related transactions along with the corporate income tax finalization dossier.

- A fine from 15,000,000 VND to 25,000,000 VND for submitting tax dossiers late over 90 days from the deadline, where payable tax arises, and the taxpayer has fully paid the tax and late payment fees to the state budget before the tax authority announces the tax inspection, audit decision, or before the tax authority makes a record of the delay in submitting the tax dossier as provided in Clause 11, Article 143 of the Tax Administration Law.

Note: The above penalties apply to organizations. The penalty for individuals will be half of the organization's penalty.