Tax calculation in cases where individuals lease out their property or directly sign contracts to work as lottery agents, insurance agents in Vietnam

Tax calculation in cases of individuals leasing out their property in Vietnam

- 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. Lodging services that are not considered property lease include:

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.

- Lessors shall declare tax separately on each rent payment (according to the beginning date of the lease period) or by calendar year.

The lessor shall declare tax on each contract separately, or declare tax on multiple contracts on the same declaration if the pieces of property are under the management of the same tax authority.

- In case an individual's only business operation is property lease, the lease duration is shorter than 1 year, and the revenue from property lease does not exceed VND 100 million per year, he/she is not required to pay VAT and PIT.

In case the lessees pay the rent in advance for many years, the revenue as the basic to determine whether individuals must pay tax or not is the lump sum payment according to the calendar year.

- In case the lessee pays the rent in advance for multiple years, the lessor shall declare and pay tax in a lump sum for the rent paid in advance. The lump sum tax shall be the sum of tax payable in each calendar year as per regulations.

In case of change in the content of the lease contract that leads to change to the taxable revenue, payment period or lease period, the individual shall make revisions for the tax period in which the change occurs in accordance with the Law on Tax Administration.

Pursuant to: Clause 1, Article 9 of Circular 40/2021/TT-BTC and Clause 3, Article 1 of Circular 100/2021/TT-BTC

Tax calculation in cases where individuals lease out their property or directly sign contracts to work as lottery agents, insurance agents in Vietnam (Internet image)

Tax calculation in cases where Individuals directly sign contracts to work as lottery agents, insurance agents, MLM agents

- Commission agents are individuals who directly sign commission agent contracts with lottery enterprises, insurers, MLM enterprises to work as lottery agents, insurance agents, MLM agents respectively.

- Individuals directly sign contracts to work as lottery agents, insurance agents, MLM agents shall not declare tax directly, except in the cases specified in Point d of this Clause.

The lottery enterprise, insurer or MLM enterprise shall deduct, declare and pay PIT if the commission paid to the individual in the calendar year exceeds 100 million VND.

In case the individual earns a revenue of not exceeding 100 million VND/year at multiple locations, the individual estimates or determines that the total revenue exceeds 100 million VND/year, he/she may authorize the paying organization to deduct tax from the commission receivable in the tax year.

- Lottery enterprises, insurers, MLM enterprises shall declare tax monthly or quarterly in accordance with tax administration laws and are not required to declare PIT deducted from incomes of their agents;

- In case the paying organization does not deduct tax because the income is below the level subject to deduction, the individual does not authorize the paying organization to deduct tax and the individual’s income reaches the taxable level at the end of the year, the individual shall declare and pay tax incurred in the year.

Pursuant to: Clause 2, Article 9 of Circular 40/2021/TT-BTC

Mai Thanh Loi

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE