Are self-built houses exempt from taxes in Vietnam?

Are self-built houses exempt from taxes in Vietnam?

As prescribed in the Official Dispatch 3077/TCT-CS in 2018, there are instructions on tax collection management for housing construction activities as follows:

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Based on the provisions of Article 11 of the Tax Administration Law No. 78/2006/QH11 on the responsibilities of People's Councils and People's Committees at all levels in tax management;

Based on the provisions of Clause 1, Article 16 of the Tax Administration Law No. 78/2006/QH11 stipulating the responsibilities of organizations and individuals in tax management;

The General Department of Taxation has issued Official Dispatch 3381/TCT-CS dated September 8, 2008 and Official Dispatch 2010/TCT-CS dated May 16, 2017, which clearly state: Households that build houses themselves are not taxpayers of VAT, CIT, and personal income tax; if households hire contractors who are businesses to carry out construction for the family, the construction contractor must declare and pay taxes in accordance with regulations.

Based on the above regulations, in cases where the Tax Department has grounds to determine that a contractor has built houses for households and individuals but has not declared and paid taxes, the Tax Department shall implement the provisions of Clause 1, Article 16 of the Tax Law. During the handling process, the Tax Department reports to the People's Committee to direct other functional units in the area to coordinate implementation in accordance with Article 11 of the Tax Administration Law.

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Therefore, households and individuals when self-building houses do not have to declare and pay VAT, CIT, and personal income tax. In cases where households hire contractors who are businesses to carry out construction, the construction contractor must declare and pay taxes in accordance with regulations.

Are self-built houses exempt from taxes in Vietnam? - Image from Internet

What are conditions for granting construction permits for separate houses in urban areas in Vietnam?

Pursuant to Article 93 of the Law on Construction in 2014 (amended by Clause 32 Article 1 of the Law on amendments to the Law on Construction in 2020) stipulating conditions for granting construction permits for separate houses as follows:

Conditions for granting construction permits for separate houses

1. General conditions for the grant of construction permits for separate houses in urban areas include:

a/ The detached house is conformable with land use purposes as prescribed by the Law on land and architectural management regulations adopted by competent state agencies;

b/ Ensuring safety for the works and adjacent works and meeting requirements on environmental protection and fire and explosion prevention and fighting; ensuring safety for technical infrastructure and protection corridors of irrigation works, dikes, energy works, traffic works, cultural heritage zones, historical-cultural relics; ensuring safety distance to fire- or explosion-prone and hazardous facilities, and important works related to national defense and security;

c/ Having their construction designs made under Clause 7, Article 79 of this Law;

d/ Having dossiers of application for construction made under Clause 1, Article 95, and Articles 96 and 97 of this Law.

2. Separate houses in urban areas must meet the conditions prescribed in Clause 1 of this Article and conform with detailed construction plans. Separate houses located in stable areas or street routes in urban centers which have no detailed construction master plans, must comply with regulations on management of planning, urban architecture and urban designs promulgated by competent state agencies.

3. Separate houses in rural areas, when constructed, must conform with detailed construction master plans for rural residential points.

As regulations above, conditions for granting construction permits for separate houses in urban areas in Vietnam are as follows:

- The detached house is conformable with land use purposes as prescribed by the Law on land and architectural management regulations adopted by competent state agencies;

- Ensuring safety for the works and adjacent works and meeting requirements on environmental protection and fire and explosion prevention and fighting; ensuring safety for technical infrastructure and protection corridors of irrigation works, dikes, energy works, traffic works, cultural heritage zones, historical-cultural relics; ensuring safety distance to fire- or explosion-prone and hazardous facilities, and important works related to national defense and security;

- Having their construction designs made under Clause 7, Article 79 of the Law on Construction in 2014;

- Having dossiers of application for construction made under Clause 1, Article 95, and Articles 96 and 97 of the Law on Construction in 2014.

- Complying with the detailed construction plans. Separate houses located in stable areas or street routes in urban centers which have no detailed construction master plans, must comply with regulations on management of planning, urban architecture and urban designs promulgated by competent state agencies.

What documents are included in the dossiers of application for new construction permits for a separate house in Vietnam?

Pursuant to Clause 1 Article 95 of the Law on Construction in 2014 stipulating dossiers of application for new construction permits as follows:

Dossiers of application for new construction permits

1. A dossier of application for a new construction permit for a separate house must comprise:

a/ An application for a construction permit;

b/ A copy of one of the papers proving land use rights as prescribed by the land law;

c/ Construction designing drawings;

d/ A written commitment to ensure safety for adjacent works, for construction works adjacent to other works.

2. A dossier of application for a construction permit for a work to be built not in line must comprise:

a/ An application for a construction permit;

b/ A copy of one of the papers proving land use rights as prescribed by the land law;

c/ A copy of the project approval or investment decision;

d/ Construction designing drawings;

dd/ Declarations on the capabilities and experiences of designing organizations or individuals in charge of construction designing, enclosed with copies of practice certificates of design managers.

3. A dossier of application for a construction permit for a work to be built in line must comprise:

a/ Documents prescribed at Points a, c, d and dd, Clause 2 of this Article;

b/ Written approval of a competent State agency of the location and plan of the line;

c/ The land recovery decision of a competent state agency as prescribed by the land law.

As regulations above, the dossiers of application for new construction permits for a separate house in Vietnam include following documents:

- An application for a construction permit;

- A copy of one of the papers proving land use rights as prescribed by the land law;

- Construction designing drawings;

- A written commitment to ensure safety for adjacent works, for construction works adjacent to other works.

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