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

The property market in Vietnam has been amazingly developed in the past few years.  Individuals (including local and expatriate) buying apartments, houses and then leasing them out under a standard lease agreement is getting more and more common in Vietnam. This practice raises tax implication for the rental income according to the current tax laws and regulations.  

 

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. 

 

How rental income is taxed in Vietnam

 

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

- business tax, 

- value added tax, and 

- personal income tax 

 

How to calculate rental income in Vietnam

 

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:

 

Rental income  Business tax
Above VND500 million VND 1,000,000
Above VND300million to VND500million VND 500,000
Above VND100million to VND300 million VND 300,000

 

Value added tax (VAT)

 

Taxable income is the tax-inclusive amount under lease contract (i.e. gross amount)

 

Tax rate is 5%.

 

Personal income tax (PIT)

 

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

 

Full example of property rental income tax calculation in Vietnam  

 

You signed an apartment lease contract on 27 September 2019:

  • Duration: from 1 October 2019 to 31 December 2020. 

  • Lease amount: VND33,000,000/ month (tax-inclusive)

  • Payment term: quarterly basis

 

Taxes are calculated as follows:

 

Calendar year 2019 (31.12.2019): since your rental income (i.e. VND33m/ month * 3 months = VND 99m) is lower than VND100m, no tax obligation and declaration is required.

 

Calendar year 2020 (31.12.2020): your rental income is greater than VND 100m, tax declaration and obligation is implied.

  • Business tax: VND500,000

  • VAT per quarter: VND33m * 3 months * 5% = VND 4,950,000

  • PIT per quarter: VND33m * 3 months * 5% = VND 4,950,000 


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

  • 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 office should be submitted to, is the office where rental property is located.   

 

Contact RB KTC for tax return checklists

 

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: This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it for further instruction.

 

KTC - member of Russell Bedford International, a global network accounting firm. KTC provides property leasing tax returns services for individuals and expatriates in Vietnam