Vietnam: Shall people pay personal income tax for inherited assets? What are procedures of heritance declaration?

Hello Mr. Viet An, LawNet wwould like to answer your questions as following:

1. Is inherited property payable for PIT?

Pursuant to Clause 9 Article 2 Circular 111/2013/TT-BTC on taxable incomes, incomes from heritance include:

- Inherited 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.

- Inherited 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.

- Inherited 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 inherited real estate mentioned in Point d Clause 1 Article 3 of this Circular.

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

Moreover, according to Clause 4 Article 4 Law on Personal Income Tax 2007, incomes from receipt of inheritances or gifts that are real estate between spouses, parents and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among blood siblings are exempted.

Therefore, inherited property include securities, capital in economic organizations and businesses, real estate and other inherited assets must be registered with state agencies, are payable for tax, except for cases prescribed in Clause 4 Article 4 Law on Personal Income Tax 2007.

2. Procedures of heritance declaration

2.1. Documents

Documents of heritance declaration include:

- Death certificate of the estate leaver;

- Copy of testament (inheritance under a will);

- Documents in identity of the heirs (household, identity card,...);

- Documents to prove personal relation between the heir and the estate leaver (inheritance by law);

- Documents of assets (Certificates of land use rights, ownership of houses and other land-attached assets; certificate of shares,...);

- Othẻ documents (certificate of marital status, marriage certificate, etc.)

2.2. Heritage declaration

Pursuant to Article 57 and 58 of Law on Notarization 2014 of Vietnam: 

The heirs at law or under a testament which does not specify the portion of the estate to be enjoyed by each heir may request notarization of their written agreement on the division of the estate.

A notary shall verify whether an estate leaver is the person having land use rights or asset ownership and the notarization requesters are estate heirs; if suspecting or having grounds to believe that the leaving and inheritance of the estate are unlawful, the notary may reject the notarization request or conduct verification or solicit assessment at the request of the notarization requester.

If the dossier is complete and in accordance with the provisions of law, the notary agency shall accept the notarization of the agreement on division of the estate, the document declaring the inheritance.

- The acceptance must be listed within 15 days from the date of listing. The listing shall be carried out by a notarial practice organization at the headquarters of the commune-level People's Committee of the last place of residence of the estate leaver; in case the last place of permanent residence cannot be determined, it shall be listed at the place of temporary residence with the last term of the person or the place where the immovable property is the estate.

- After 15 days of listing, if there is no complaint or denunciation, the notary agency shall certify the inheritance document. The co-heirs can make a written agreement on the division of the inheritance or a written declaration of inheritance.

Upon completion of the above procedures for declaration of inheritance, the estate beneficiary must carry out the procedures for registration of property rights to the property subject to registration of ownership in accordance with the law:

- For assets being land and houses, the heirs shall carry out registration procedures at the district-level land use right registration office in the locality where the land is located.

- For assets being cars and motorbikes, the heirs shall carry out registration procedures at the Vehicle Registration Office.

Best regards! 

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