Do parents who donate and inherit real estate for their children have to pay personal income tax in Vietnam?
How is income from inheritance taxed?
According to Clause 9 Article 2 of Circular 111/2013/TT-BTC Guiding the Law on personal income tax in Vietnam and Decree 65/2013/ND-CP issued by the Minister of Finance, regulations on income from inheritance as follows: after:
Income from inheritance is the income that an individual receives under a will or in accordance with the law on inheritance, specifically as follows:
- For inheritance being securities, include: stocks, stock options, bonds, bills, fund certificates and other types of securities in accordance with the Law on Securities; individual shares in a joint-stock company in accordance with the Law on Enterprises.
- For inheritance, it is the capital portion in economic organizations and business establishments, including: contributed capital in limited liability companies, cooperatives, partnerships, business cooperation contracts; capital in private enterprises, business establishments of individuals; capital in associations and funds permitted to be established in accordance with law, or the entire business establishment, if it is a private enterprise, or an individual's business establishment.
- For inheritance being real estate, including: land use rights; the right to use land with assets attached to the land; home ownership, including future housing; infrastructure and construction works attached to land, including construction works to be formed in the future; the right to lease land; the right to rent water surface; other income received from inheritance is immovable in any form; minus income from inheritance being real estate as guided at point d, clause 1, Article 3 of this Circular.
- For inheritance, other assets must have their ownership or use rights registered with the State management agency, such as automobiles; motorcycles, mopeds; ships, including barges, canoes, tugs and pushers; boats, including yachts; Airplane; hunting rifle, sport gun
Do parents who donate and inherit real estate for their children have to pay personal income tax in Vietnam? (Image from: Internet)
How is income from gifts taxed?
According to Clause 10, Article 2 of Circular 111/2013/TT-BTC Guiding the Law on personal income tax in Vietnam and Decree 65/2013/ND-CP issued by the Minister of Finance, stipulating income from receiving gifts such as: after:
Income from receiving gifts is an individual's income received from domestic and foreign organizations and individuals, specifically as follows:
- For the receipt of gifts being securities, including: stocks, the right to buy stocks, bonds, bills, fund certificates and other securities in accordance with the Law on Securities; shares of individuals in a joint-stock company in accordance with the Law on Enterprises.
- For gift recipients, the capital portion in economic organizations and business establishments, including capital in limited liability companies, cooperatives, partnerships, business cooperation contracts, capital in private enterprises, business establishments of individuals, capital in associations, funds permitted to be established in accordance with law, or the entire business establishment if it is a private enterprise, business establishments of individuals. core.
- For receiving gifts being real estate, including: land use rights; the right to use land with assets attached to the land; home ownership, including future housing; infrastructure and construction works attached to land, including construction works to be formed in the future; the right to lease land; the right to rent water surface; other income received from inheritance is immovable in any form; minus income from gifts being real estate guided at Point d, Clause 1, Article 3 of this Circular.
- For receiving gifts as other assets, ownership or use rights must be registered with state management agencies, such as cars; motorcycles, mopeds; ships, including barges, canoes, tugs and pushers; boats, including yachts; Airplane; hunting rifle, sport gun.
Income from inheritance, gifts being real estate between natural parents and biological children is tax-exempt income or not?
According to Official Letter 27130/CTHN-TTHT in 2022 of the Hanoi Tax Department, the answer to this tax-exempt income is as follows:
Pursuant to Clause 1, Article 3, the following incomes are exempt from tax:
- Incomes from inheritance, gifts being real estate (including houses, construction works to be formed in the future according to the provisions of law on real estate business) between: husband and wife; biological father, natural mother with natural child; adoptive father, adoptive mother with adopted child; father-in-law, mother-in-law with daughter-in-law; father-in-law, mother-in-law with son-in-law; grandpa, paternal grandmother with grandchild, paternal grandfather, grandmother with grandchild; siblings together.
Pursuant to the above provisions, in case an individual receives an income from an inheritance or a gift in cash which is not part of the incomes specified in Clause 9, Clause 10, Article 2 of Circular 111/2013/TT - BTC mentioned above, individuals do not have to pay PIT.
- Incomes from inheritance or gifts being real estate between biological fathers, natural mothers and their biological children are eligible for PIT exemption under Clause 1, Article 3 of Circular 111/2013/TT-BTC.
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