“Tax Authority Requests Closer Collaboration on Rental Income Taxation”
The Tax Authority has issued a document to the People’s Committees of provinces and centrally-run cities, proposing enhanced coordination and direction in tax management for households and individuals renting out houses, offices, and other spaces.
Individuals completing procedures at Ho Chi Minh City Tax Department headquarters
According to the Tax Authority, there are still cases of households and individuals failing to declare or fully disclose their income from renting houses, offices, or premises.
Therefore, the Tax Authority requested that the People’s Committees of provinces and cities direct the People’s Committees of wards, communes, towns, and residential groups to coordinate and share information with tax authorities about households and individuals renting houses, offices, or accommodation services in their respective areas.
Regarding tax obligations for renting houses, offices, or accommodation services, Circular 40/2021/TT-BTC of the Ministry of Finance stipulates that individuals renting out houses must make tax declarations for each contract or for multiple contracts on one declaration form if the rented assets are located in areas under the management of the same tax authority.
The Law on Tax Administration also stipulates that individuals renting out houses must declare taxes for each payment period (determined from the start date of the rental term for each payment period) or declare taxes annually according to the calendar year.
Speaking to the NLD newspaper, an inspector from Ho Chi Minh City Tax Department shared that currently, households and individuals renting out houses are responsible for their own tax declaration and payment and are held accountable before the law for their tax declaration and payment.
Accordingly, those with an annual income of over VND 100 million from renting houses are subject to a 10% tax rate on their revenue, comprising 5% personal income tax and 5% value-added tax.
However, in reality, some individuals have been found to declare their rental income dishonestly to reduce their tax liability.
When fraud is detected, the tax authority will coordinate with the police and local authorities of wards, communes, and towns to conduct onsite surveys to accurately determine the actual income. Penalties and back taxes will then be imposed on the violating households and individuals.
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