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If I rent a house under 100 million/year, do I have to declare tax?

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When renting assets from individuals such as: premises, factories, machinery, means of transport, etc.. What documentation procedures are needed to make the above costs reasonable? And to be determined as costs When finalizing corporate income tax, what fees and taxes must be paid? All will be clarified in the article below.

Determining taxable revenue according to the lease period: Property lease contracts usually have a non-fixed period of one year but can last for many years.

1. TAXABLE REVENUE IS CALCULATED FROM THE TIME OF SIGNING THE CONTRACT TO THE END OF THE YEAR.

1.1 Lease for less than one year.

– If revenue is less than 100 million: You do not have to declare license fees, VAT, and personal income tax on that revenue.

For example: S4B Vietnam rented Mr. A’s house for the company’s office, for a 5-month rental period (August 1, 2018 to December 31, 2018) with a rental price of 10 million/month.

If the total annual revenue is 50 million or less than 100 million, there is no need to declare license fees, VAT, and personal income tax, which are still allowed to be accounted for as reasonable expenses.

– If revenue is over 100 million: Must declare license fees and VAT, personal income tax as well as pay taxes arising on that revenue to the managing agency.

For example: S4B Vietnam rented Mr. A’s house for the company’s office, for a 5-month rental period (August 1, 2018 to December 31, 2018) with a rental price of 30 million/month.

If the total annual revenue is 150 million over 100 million, you must declare and pay license fees, VAT, and personal income tax.

Do I have to pay tax if I rent a house under 100 million VND/year?

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1.2 Rent over many years.

If revenue is less than 100 million: You do not have to declare license fees, VAT, and personal income tax on that revenue.
If revenue is over 100 million: Must declare license fees and VAT, personal income tax as well as pay tax arising on that revenue to the tax authority.

For example: S4B Vietnam rented Mr. A’s house to use as the company’s office, the rental period is 2 years and 4 months (September 1, 2018 to December 31, 2020) with a rental price of 15 million. /month.

2018: Rental period is 4 months (September 1, 2018 to December 31, 2018), total rental revenue is 60 million/year, less than 100 million/year. You still have to declare that revenue to the tax authority because the contract term lasts for many years, but you do not have to pay license fees as well as VAT and personal income tax on that revenue in 2018.

2019 and 2020: Total rental revenue per year is 180 million/year, because at the time of rental, the revenue has already been declared to the tax authority, so in the following years there is no need to declare again, just pay the required amounts : License fee, 5% VAT and 5% personal income tax on revenue for 1 year (Can be paid once at the beginning of the year or divided into payment according to the rental payment deadline on the contract).

What Documents Will I Need for Taxes if I Rented a House Last Year?

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2. RENTAL PROCEDURES AND TAX REGULATIONS ARISING FROM PROPERTY RENTAL.

2.1 Revenue under 100 million/year.

Procedure documents needed:

A property lease contract signed between the lessor and the lessee does not need to be notarized.
Payment documents: Receipt slip, payment slip, Debit note, Credit note
There is no need to declare to the tax authority and also do not have to pay 5% VAT and 5% personal income tax on that rental revenue.

2.2 Tax declaration documents and procedures when leasing property.

a) File.

Original copy of rental contract.
ID card of the house owner.
Form 05 – DK – TCT issued together with Circular 95/2016/TT – BTC (for individuals without a tax code for property rental).
License fee declaration issued according to Decree 139/2016/ND – CP.
Property rental tax declaration Form 01/TTS issued with Circular 92/2015/TT – BTC
Form 01 – 1/BK – TTS (For the first tax declaration of the lease contract).

b) Procedures.

Contact the tax authority at the place where the property is rented to proceed with the declaration.
If an individual does not have a property rental tax code, they must contact the inter-ward tax team where the rental property is located to carry out procedures for granting a tax code.
After having the code, submit the above documents to the inter-ward management where the rental property is located so that the tax staff can issue the documents.
Once you have completed the tax declaration, base on the declaration to pay the arising tax to the state budget.
Only declare once until the contract expires. If there are any changes during the rental process, you must contact the tax authority to declare adjustments.
The time limit for tax declaration is from the date of signing the contract to the last day of the month of signing the contract.

S4B Vietnam

Address: Unit 602A, Tower A, Handi Resco Office Building. 521 Kim Ma Street, Ba Dinh District, Hanoi
Tel: + 84 24 3974 4181
Email: service@s4b.com.vn

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