Revenue of lessors below 100 million VND/year are not required to pay taxes in Vietnam

According to Circular 100/2021/TT-BTC, from 2022, individuals lease property ( rental period is not full year) with rental revenue of 100 million VND/year or less, they are not required to pay value added tax (VAT), personal income tax (PIT) in Vietnam

Revenue of lessors below 100 million VND/year are not required to pay taxes in Vietnam

On November 15, 2021, the Minister of Finance of Vietnam issued Circular 100/2021/TT-BTC amending Circular 40/2021/TT-BTC  on value-added tax, personal income tax and tax administration of household businesses and individual businesses.

According to the Circular, amendments to the tax calculation method for Individuals leasing out their property at Point c, Clause 1, Article 9 of Circular 40/2021/TT-BTC as follows:

If the revenue of individuals who only have property leasing activities with rental period that is not a full year is 100 million VND/year or less, they are not required to pay VAT and are not required to pay PIT.

In case the lessee pays the rent in advance for multiple years, the level of revenue to determine whether an individual is taxable or not is the one-time payment amortized according to the calendar year.

Currently, Circular 40/2021/TT-BTC stipulates that the lessor who earns revenue in fewer than 12 months in the calendar year (even if he/she has multiple lease contracts), the revenue of not exceeding 100 million VND/year as the basis for exemption from VAT and PIT shall be the taxable revenue of a calendar year (12 months)

The actual revenue as the basis for calculation of tax payable in the year shall be the revenue proportional to the number of months in which property is leased.

Lessors are individuals who earn revenue from leasing out:

- Housing, premises, stores, factories, storage without lodging services;

- Vehicles, equipment without operator;

- Other property without associated services.

Note: Lodging services that are not considered property lease as guided in Clause 1, Article 9 of Circular 40/2021, including:

+ Provision of short-term lodging for tourists and other visitors;

+ Provision of long-term lodging other than apartments for students, workers and similar persons;

+ Provision of lodging together with food and beverage services or entertainment.

Circular 100/2021/TT-BTC takes effect from January 1, 2022.

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