The property market in Vietnam has been amazingly developed in the past few years. Individuals (including local and expatriates) buying apartments, and houses and then leasing them out under a standard lease agreement is getting more and more common in Vietnam. This practice raises tax implications for the rental income according to the current tax laws and regulations.
The rental property tax is stipulated in Circular 92, 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 shall be paid one time a year. Depending on the 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 the 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 are 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 the rental property is located.
Circular 92, 2015 – Circular 92/2015/TT-BTC dated 15 June 2015 guiding implementation of value-added tax and personal income tax for residents who are doing business in Vietnam
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 advice. Please contact us at: firstname.lastname@example.org or email@example.com for further instruction.