General Department of Taxation of Vietnam responds to inquiries about personal income tax policies and registration fees

General Department of Taxation of Vietnam responds to inquiries about personal income tax policies and registration fees​ (Image from the Internet)

The General Department of Taxation of Vietnam issued Official Dispatch 427/TCT-DNNCN on January 24, 2025, addressing issues concerning personal income tax policies and registration fees.

General Department of Taxation of Vietnam responds to inquiries about personal income tax policies and registration fees

The General Department of Taxation of Vietnam received Official Dispatch 88593/CTHN-QLD from Hanoi City's Tax Department, Official Dispatch 3243/CTCTH-NVDTPC from Can Tho City's Tax Department, and Official Dispatch 1564/CTCBA-NVDTPC from Cao Bang Province's Tax Department seeking guidance on determining subjects exempt from registration fees and personal income tax from real estate transfers. On this matter, the General Department of Taxation provides the following opinion:

- According to Clause 10, Article 10 of Decree 10/2022/ND-CP on registration fees:

“Article 10. Exemption from registration fees

10. Houses, land inherited or given as gifts between: Husband and wife; biological parents and biological children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; grandparents and grandchildren; siblings, and are granted certificates of land use rights, ownership of houses, and assets attached to land by competent state agencies.”

- At points a, d, Clause 1, Article 3 of Circular 111/2013/TT-BTC:

“Article 3. Tax-exempt income

1. Based on the provisions of Article 4 of the Law on Personal Income Tax, Article 4 of Decree 65/2013/ND-CP, tax-exempt income includes:

a) Income from real estate transfer (including future housing, construction projects under future real estate business law) between: Husband and wife; biological parents and biological children; adoptive parents and adopted children; parents-in-law and daughters-in-law; fathers-in-law, mothers-in-law and sons-in-law; grandparents and grandchildren; siblings.

If real estate (including future housing, construction projects under future real estate business law) is created by either spouse during the marriage and deemed joint property, upon divorce is divided by agreement or court decision, this distribution qualifies for tax exemption.

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d) Income from inheritance, gifts as real estate (including housing, future construction projects according to real estate business law) between: Husband and wife; biological parents and biological children; adoptive parents and adopted children; parents-in-law and daughters-in-law; fathers-in-law, mothers-in-law and sons-in-law; grandparents and grandchildren; siblings.”.

- At point h, Clause 1, Article 7 of Circular 43/2023/TT-BTC amending Clause 1, Article 53 of Circular 80/2021/TT-BTC:

“1. In case of transfer, inheritance, or gift of real estate (including future housing, future construction projects, projects already handed over by project owners but without land use rights certificates, housing ownership rights, and assets attached on land according to housing law and real estate business law) between husband and wife; between biological parents and children; adoptive parents and children; between in-laws and children in law; between grandparents and grandchildren; between siblings. Tax exemption documents include:

Personal income tax declaration form No. 03/BDS-TNCN appended to Annex II of this Circular.

The tax authorities are responsible for extracting information from the National Residential Database as stipulated in Article 84 of this Circular to process tax exemption procedures. If unable to extract the citizen's residency information from the National Residential Database, the taxpayer should provide relevant documents to ascertain the tax-exempt subject in each case. Specifically:

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h) In cases of real estate transfer, inheritance, gifts eligible for tax exemption stated in Clause 1 of this Article, apart from the aforementioned documents, the transferor or heir, beneficiary can use other documents endorsed by competent authorities regarding the relationship between the transferor and the transferee, heir, or beneficiary as a basis to determine tax-exempt income.”

Based on the stipulated regulations, instances of transfer, inheritance, or gifting of real estate between parents-in-law and daughters-in-law; between parents-in-law and sons-in-law after the child receives the real estate or if the spouse of the child is deceased, are eligible for exemption from registration fees and personal income tax if the taxpayer possesses documents from authorized agencies as prescribed in point h, Clause 1, Article 7 of Circular 43/2023/TT-BTC verifying the relationship between the transferring and receiving parties as parents-in-law or parents-in-law and the son-in-law or daughter-in-law after receipt of real estate or if the spouse is deceased.

More details can be found in Official Dispatch 427/TCT-DNNCN dated January 24, 2025.

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