Deducting, declaring, paying tax incurred by property lessors

1. The lessor declares tax directly:

Property lessors who declare tax directly are persons who sign lease contract with other persons; persons who sign lease contract with organizations other than business organizations (regulatory agencies, associations, international organizations, embassies, consulates, etc.); person who signs lease contract with enterprises, business organizations which do not require the lessee to pay tax on the lessor’s behalf.

a) Tax declaration principles

– The lessor shall declare VAT and/or PIT if the revenue from lease of property in the calendar year is over VND 100 million.

– The lessor may choose between declaring tax by payment term or once per year. If there is a change to the lease contract which leads to a change to the taxable revenue, payment term, or lease term, the lessor shall make an additional declaration in accordance with the Law on Tax administration during the tax period in which the change occurs.

– The lessor may declare tax on each contract or multiple contract using the same declaration if the prices of property are under the management of the same local tax authority.

b) Tax declaration documents:

Documents for declaration of tax on property lease by an individual include:

– The declaration form No. 01/TTS enclosed herewith;

– The appendix form No. 01-1/BK-TTS enclosed herewith (for the first tax declaration of the contract or contract appendix);

– A photocopy of the lease contract, contract appendix (for the first tax declaration of the contract or contract appendix);

– A photocopy of the letter of attorney (if the lessor authorizes a legal representative to declare and pay tax).

c) Places for submitting tax declaration documents:

Tax declaration documents shall be submitted to the Sub-department of taxation of the district where the leased property is located.

d) Deadline for submitting tax declarations

– The deadline for submitting tax declaration documents is the 30th day of the quarter succeeding the quarter in which the lease term begins if the lessor declares tax by payment term.

Example 9: Mr. X has a house lease contract for 02 years from April 10, 2015 to April 9, 2017. Rents are paid every 03 months. If Mr. X declares tax quarterly, the deadlines for declaring tax will be July 30, 2015 (the 30th day of the first month of the third quarter), October 30, 2015, and so on.

If the lease contract stipulates that rents are paid every 6 months and Mr. X also declares tax every 6 months, the deadlines for declaring tax will be July 30, 2015 (the 30th day of the first month of the third quarter), January 30, 2016 (the 30th day of the first month of the first quarter), and so on.

– The deadline for submission of tax declarations by businesspeople declaring tax once per year is the 90th day from the end of the calendar year.

dd) Deadline for paying tax

Deadline for paying tax is the same as the deadline for submitting tax declarations.

2. The enterprise or business organization declares and pays tax on behalf of the property lessor:

If the lease contract with an enterprise or business organization (hereinafter referred to as lessee) stipulates that the lessee shall pay tax on behalf of the lessor, the lessee shall deduct tax, declare and pay tax on behalf of the lessor, including VAT and PIT.

a) Deducting tax

The lessee shall deduct VAT and PIT before paying the rent to the lessor of the lessor’s revenue from the lease of such property in the calendar year is over VND 100 million. If the lessor earns revenues from multiple places in the year and estimates (or determines) that the total revenue exceeds VND 100 million per year, the lessor may authorize the lessee to declare and pay tax on his/her behalf even if the contract value with such lessee is VND 100 million per year or lower.

The tax deducted shall be determined in accordance with Clause 2 Article 4 of this Circular.

b) Tax declaration principles

The lessee who declares tax on behalf of the lessor must write it on the tax declaration and append the seal on the declaration. On the tax declaration and tax payment receipt, the taxpayer is still the lessor.

The lessee that declares that on behalf of the lessor shall use form No. 01/TTS for each contract or for multiple contracts on the same declaration if the prices of property are under the management of the same local tax authority.

c) Tax declaration documents:

Documents for declaration of tax on property lease by an individual include:

– The declaration form No. 01/TTS enclosed herewith;

– The appendix form No. 01-1/BK-TTS enclosed herewith;

– A photocopy of the lease contract, contract appendix (for the first tax declaration of the contract or contract appendix).

d) Places for submitting tax declaration documents; deadline submitting tax declaration documents and deadline for paying tax

The places for submitting tax declaration documents; deadline submitting tax declaration documents and deadline for paying tax in case the lessee declares and pays tax on behalf of the lessor are the same as those in case the lessor declares tax himself/herself prescribed in Point c, Point d, and Point dd Clause 1 of this Article.

Article 9. Deducting tax, declaring tax, paying tax incurred by lottery, insurance, and multi-level marketing agents.

1. Deducting tax

The lottery company, insurer, multi-level marketing company who pays commission to the agent shall deduct PIT if the company determines that the commission paid to the agent in the calendar year exceeds VND 100 million.

If the businessperson earns revenues from multiple sources in the year and estimates (or determines) that the total revenue exceeds VND 100 million per year, he/she may authorize the company to deduct tax from the commission even if the commission paid by the company is VND 100 million per year or lower.

The tax deducted shall be determined in accordance with Clause 2 Article 5 of this Circular.

2. Tax declaration principles:

– If the lottery company, insurer, or multi-level marketing company that deducts personal income tax from revenues of the agent shall declare tax monthly or quarterly. Rules for determining whether to declare tax monthly or quarterly are provided for in Point a Clause 1 Article 16 of Circular No. 156/2013/TT-BTC.

– The lottery company, insurer, or multi-level marketing company shall declare tax monthly or quarterly and is not required to make an annual statement of deduction of PIT incurred by their agents.

– The lottery, insurance, or multi-level marketing agent who has to pay additional tax because the company did not deducted tax (the revenue is below the taxable level) will use the annual declaration form No. 01/TKN-XSBHĐC enclosed herewith.

3. Tax declaration documents:

a) Monthly, quarterly tax declaration documents of deducting organization:

– The lottery, insurance, or multi-level marketing company shall deduct tax on the commission paid to the agent using the declaration form No. 01/XSBHĐC enclosed herewith.

– The declaration of the last month or last quarter of the year must be enclosed with the appendix form No. 01-1/BK-XSBHĐC enclosed herewith whether tax is deducted or not.

b) Annual tax declaration documents submitted by the agent who directly declares tax

Lottery agents, insurance agents, and multi-level marketing agents who declare tax annually shall use the declaration form No. 01/TKN-XSBHĐC enclosed herewith,

c) Places for submitting tax declaration documents:

– The lottery, insurance, and multi-level marketing companies who deduct tax on the commission paid to their agents shall submit tax declaration documents to its supervisory tax authority.

– Lottery agents, insurance agents, and multi-level marketing agents who declare tax annually shall submit tax declaration documents to Sub-departments of taxation of the district where they reside (whether temporarily or permanently).

d) Deadline for submitting tax declaration documents:

– Lottery, insurance, and multi-level marketing companies shall submit monthly tax declaration documents by the 20th of the month succeeding the month in which tax is incurred.

– Lottery, insurance, and multi-level marketing companies shall submit quarterly tax declaration documents by the 30th of the quarter succeeding the quarter in which tax is incurred.

– Businesspeople declaring tax annually shall submit tax declaration documents within 90 days from the end of the calendar year.

dd) Deadline for paying tax

– Lottery, insurance, and multi-level marketing companies shall pay monthly/quarterly tax by the deadline for submitting monthly/quarterly tax declaration documents.

– Businesspeople who declare tax annually shall pay tax by the deadline for submitting annual tax declarations.

Article 10. Authorizing tax collection

Tax authorities of the administrative divisions in which electronic tax collection is not applied shall authorize other organizations to collect tax from flat-tax payers. The authorization must be made into a contract between the head of the tax authority and the organization authorized to collect tax (hereinafter referred to as authorized collector).

Authorize collectors include: management boards of markets, shopping malls, enterprises having nationwide networks that enable people to pay tax such as postal and telecommunication enterprises, electricity enterprises, etc.

The authorized collectors prescribed in this Article shall receive funding from tax authorities.

Tax authorities shall use their budgets to pay authorized collectors under contracts.

The Director of the General Department of Taxation shall organize the uniform authorization of tax collection nationwide according to applicable regulations on authorizing tax collection and regulations of this Article.