Is income from receipt of donation of land to build a lineage hall in Vietnam?

Hello, Lawnet would like to answer the following:

1. Is income from receipt of donation of land to build a lineage hall in Vietnam?

According to the provisions of Clause 10, Article 2 of Circular 111/2013/TT-BTC, the taxable incomes:

Incomes from receipt of gifts are incomes the person receives from organizations and individuals at home and overseas. To be specific:

- Gifts being securities: shares, call options on shares, bonds, treasury bills, fund certificates, and other securities according to the Law on Securities; shares of the person in the joint-stock company according to the Law on Enterprises.

- Gifts being capital in economic organizations and businesses: capital contribution to limited liability companies, cooperatives, partnerships, business cooperation contracts; capital in private enterprises and businesses of the person; capital in associations and funds established within the law, or the entire business if the private enterprise or business is under the ownership of the person.

- Gift being real estate: rights to use land, rights to use land and property thereon; ownership of houses, including future houses, infrastructure and constructions on land, including off-the-plan constructions; rights to rent land or water surface; other incomes from inheritance being real estate in any shape or form, except for incomes from the gifts being real estate mentioned in Point d Clause 1 Article 3 of Circular 111/2013/TT-BTC.

- The ownership and use rights of gifts being other assets (cars, motorbikes, ships, barges, speedboats, towboats, yachts, airplanes, hunting guns, sporting guns) must be registered with state agencies.

Note:

According to Point d, Clause 1, Article 3 of Circular 111/2013/TT-BTC. tax-free incomes include incomes from inherited real estate (including future houses and constructions according to regulations of law on real estate trading) between:

- Husband and wife,

- Parents and children;

- Adoptive parents and adopted children;

- Parents-in-law and children-in-law;

- Grandparents and grand children,

- Among siblings.

Thus, the recipient of a donation of land to build lineage hall still has to pay personal income tax, unless the recipient has a relationship with the donor specified at Point d, Clause 1, Article 3 of Circular 111/2013/TT-BTC.

2. Basis for calculating tax on incomes from inheritance and gifts which is the land to build the lineage hall

Article 16 of Circular 111/2013/TT-BTC stipulates basis for calculating tax on incomes from inheritance and gifts as follows:

Tax payable:

Personal income tax payable

=

Assessable income

x

10% tax

In there:

- Assessable income

+The value of rights to use land is based on the land price list made by the People’s Committee of the province before the person registers the rights to use real estate.

+ The value of houses and constructions on land is based on the regulations of competent authorities in charge of house classification, construction standards and limits imposed by competent authorities, residual value of the house or construction when the ownership is registered.

If the value is not identifiable, the prices imposed by the People’s Committee of the province shall apply.

- Tax rate: The rate of personal income tax on the income from inheritance and gifts is 10% according to the whole income tax table.

Thus, income from receiving gifts that are real estate is determined to be taxable income. Thus, the property being land use rights, the land for the construction of the religious church acquired from the donation with a value exceeding 10 million VND is subject to tax.

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Key word: land | income | in Vietnam | tax | PIT | lineage hall |

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