House rental tax return

Depending on the income from the rental of houses, rooms, and apartments, there are cases of partial tax exemption, in some cases, value-added tax and personal income tax must be paid. So what is personal income tax? What is the new regulation on house rental tax under the rules of 2022? This article on TASCO will help customers better understand the above questions.

1. What is personal income tax?

🌟 Personal income tax (PIT) is an amount that income earners must deduct part of their salary, or from other sources of revenue, into the state budget after deductions have been made.

🌟 PIT is not levied on low-income individuals, so this revenue will be fair to all beneficiaries, reducing the social class gap.

2. Tax regulations when renting a house:

📜 For activities of leasing houses, land use rights, water surface, and other assets without business registration, taxpayers are individuals who own houses, land use rights, water surface, and other assets. In case many individuals jointly own houses, land use rights, water surface, and other properties, the taxpayer is each individual who has the right to own and use.

📜 Individuals who only have property leasing activities (renting houses, premises, shops, factories, and warehouses, excluding accommodation services; renting means of transport, machinery, and equipment without people) control; leasing other properties without services) and the lease period is not a full year, if the rental revenue is 100 million VND/year or less, it is not subject to value-added tax. do not have to pay personal income tax.

⇒ For example: Mr. A has only one house for rent for 20 million VND/month, but he rents it out for 4 months/year. Mr. A does not need to pay personal income tax and value-added tax because the total of Mr. A's revenue is 80 million VND/year (under 100 million VND/year).

3. How to calculate the payable license tax:

📜 License tax is a tax that must be paid by business owners (lessors) with annual revenue of over VND 100 million. The license fee will be paid based on the registered capital stated on the business license and the average annual income of the lessor. Specifically, the license fee payment rate for landlords is specified in Article 4, Clause 2 of Decree No. 139/2016 / ND-CP as follows:

Income for the year	Amount of tax to be paid
Income exceeding 500 million VND/year	1,000,000 VND/year
Income from 300 to 500 million VND	500,000 VND/year
Income from 100 to 300 million VND	300,000 VND/year

⇒ Note: Individuals and households must pay a license tax for the whole year if income from house rent arises in the first 6 months of the year. In particular, for housing lease contracts arising in the last 6 months of the year (starting from July 1st), the payable license tax amount is equal to 1/2 of the annual license tax amount.

⇒ For example: Ms. B has rented out her house since August and the average income is estimated at 550 million VND/year, then the license tax Ms. B needs to pay is: 500,000 x ½ = 250,000 VND.

4. How to calculate personal income tax and value-added:

📜 For households and individuals that have rental properties with a total rental amount of VND 100 million or less in a year, or an average monthly rental amount of VND 8.4 million or less in a year, do not have to declare and pay personal income tax (PIT), value added tax (VAT) and the tax authority does not issue a single invoice in this case.

📜 Tax calculation formula:

PIT payable = Revenue x 5%

VAT payable = Revenue x 5%

⇒ Example: Mr. X rents a house continuously from August 2021 to December 2022, the monthly rental is 15 million VND. At that time, the total amount of house rent and personal income tax, and value-added tax that Mr. X must pay is calculated as follows:

➥ In 2021:

Mr. X rents out the house for 5 months (from August to the end of December), and the income is: 5 months x 15 million VND = 75 million VND (<100 million VND). Therefore, in 2021, Mr. X does not have to pay personal income and value-added tax on housing rental activities.

➥ In 2022:

Mr. X rents out the house for 12 months (from January to the end of December), and the income is: 12 months x 15 million VND = 180 million VND (> 100 million VND). Therefore, by 2022, Mr. X will have to pay personal income tax and VAT on his residential rental activities.

👉 Personal income tax payable by Mr. X = 180 million x 5% = 45 million dong

👉 VAT payable by Mr. X = 180 million x 5% = 45 million dong

👉 The total tax payable by Mr. X in 2022 is VND 90 million.

⇒ If you have any questions or need assistance with property rental tax declaration and payment, please register here for TASCO's earliest advice and support or contact hotline: 0975480868 (Zalo)

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