Rental property tax for individual owners (local and expat) in vn

The rental property tax is stipulated in Circular 92/2015/BTC dated 15 June 2015. Rental property individual owners including either resident or non-resident, local or expatriate having rental income greater than VND100,000,000 per annum must be responsible for declaring their taxes. 

 There are three types of taxes imposed on the property rental:

•  Business tax, 
•  Value added tax 
•  Personal income tax 

B - How to calculate rental income in Vietnam 

1. Business tax: Business tax shall be paid one time a year. Depending on commencement date of the lease, business tax shall be paid either in full or half for the calendar year. 

Business tax range is as follows:

Taxable income is the Tax-Inclusive amount under lease contract (i.e. gross amount)

Tax rate is 5%.

Similar to VAT, taxable income is the gross amount and tax rate is 5%.

Case 1:

You signed an apartment lease contract on 28 September 2019

• Leasing duration: Start from 1 Jan 2020 to 31 Dec 2020. 
• Lease amount: VND36,000,000/ month; the rental price Includes Personal Income Tax and Value Added Tax (tax-inclusive)
• Payment term: quarterly basis

Taxes are calculated as follows:

 Rental income = VND36m/ month * 12 months = VND 432m 

• Business tax per year: VND 500,000 
• VAT per quarter: VND36m * 3 months * 5% = VND 5,400,000
• PIT per quarter: VND36m * 3 months * 5% = VND 5,400,000

 Total tax for the leasing period: 500,000+ (5,400,000 + 5,400,000) * 4 = 43,700,000 VND

Case 2:

 You signed an apartment lease contract on 21 Aug 2019

• Leasing duration: Start from 31 Aug 2019 to 30 Aug 2021
• Lease amount: VND26,000,000/ month; the rental price Excludes Personal Income Tax and Value Added Tax (Tax-Exclusive)
• Payment term: Month-by-Month Basis

Taxes are calculated as follows:

Year 2019 (From 31 Aug 2019 to 31 Dec 2019: 4 months and 01 day)

Rental income = 28,888,889* 4 + (28,888,889/31)*1 = VND 116,487,456

• Business tax in year 2019: VND 250,000 (charged half year fee)
• VAT 2019: VND 116,487,456* 5% = VND 5,824,373
• PIT 2019: VND 116,487,456* 5% = VND 5,824,373

(A) Total tax for the whole year 2019: 250,000+ (5,824,373+ 5,824,373) = 11,898,746 VND

 Year 2020 (From 01 Jan 2020 to 31 Dec: 12 months)

 Rental income = 28,888,889* 12= VND 346,666,668

• Business tax in year 2020: VND 500,000 
• VAT 2020: VND 346,666,668* 5% = VND 17,333,333
• PIT 2020: VND 346,666,668* 5% = VND 17,333,333

(B) Total tax for the whole year 2020: 500,000+ (17,333,333+ 17,333,333) = 35,166,666 VND

 Year 2021 (From Jan 2021 to 30 Aug 2021: 7 months and 30 days)

 Rental income = 28,888,889* 7 + (28,888,889/31)*30 = VND 230,179,212

• Business tax in year 2021: VND 300,000 
• VAT 2020: VND 230,179,212* 5% = VND 11,508,961
• PIT 2020: VND 230,179,212* 5% = VND 11,508,961

(C) Total tax for the whole year 2021: 300,000+ (11,508,961+ 11,508,961) = 23,317,922 VND

⇒ Total tax payable for a 24 month leasing period = (A) +(B) + (C) = 11,898,746 + 35,166,666 +  23,317,922  = 70,383,334 VND

D - How to report rental income in tax returns and pay taxes in Vietnam

  It’s optional to declare tax upon either lease contract payment term or one time per calendar year.

 Tax documents include:

• Tax return (following the Form-01 stipulated in the Circular 92)
• Copy of lease contract
• Copy of landlord’s passport
•  Power of attorney (if tax agent is hired)

Depending on declaring taxes on payment term or one time per year, the deadline for tax return submission is within 30 days of the following month since the quarter-end, or 90 days since the calendar year-end (i.e. 30/ 31 March), respectively. 

Tax documents should be submitted to the office where rental property is located.   

Even though the rental property tax is straightforward, there are quite many different situations relating to rental property tax that you might need seeking for advice. Please contact us at: admin.jre@vietnamjre.com for further instruction. JRE Vietnam provides property leasing tax returns services for individuals and expatriates in Vietnam