VN plans to reduce the tax burden for individual owners
The General Taxation Department (GDT) of the Vietnamese Ministry of Finance is considering a proposal to increase the taxable income threshold for individual owners renting houses.
This is part of the value-added tax (VAT) law amendment program that the general department is consulting with experts, said Ta Thi Phuong Lan, deputy head of the GDT’s small tax administration department. and medium-sized businesses, commercial households and people.
According to experts, the threshold for rental property tax for individuals is not suitable for the real situation because the current tax rate is quite high and the threshold too low.
Individuals who rent houses or apartments have to pay the highest tax rate at 10 percent compared to many other types of service businesses (4.5 to 7 percent).
In addition, the threshold for this tax at over 100 million dong (4,255 dollars) per year or about 8.3 million dong per month is also not suited to market performance. Especially in big cities like Hanoi and Ho Chi Minh City, with this threshold most home / apartment owners have to pay this tax.
For example, if an individual renting a house has a turnover of 200 million dong per year or about 16.7 million dong per month, he must pay a tax of 20 million dong including 10 million dong in tax. on added value and 10 million dong of personal income. tax, reported chinhphu.vn.
Some experts suggest that the threshold for paying taxes should be adjusted from 30% to 40% to match the inflation rate that has exceeded 20%.
The president of the Vietnam Fiscal Advisory Association, Nguyen Thi Cuc, told the Thoi bao Tai chinh Viet Nam (Vietnam Financial Times) newspaper that for personal income tax, it is reasonable to study and adjust the taxable income threshold.
This taxable income threshold adjustment applies not only to rental real estate activities, but also to other business activities of individuals that can be adjusted to increase, such as business activities (including e-commerce), manufacturing, construction and other services.
The taxable income threshold can be raised to around 150 million dong per year or more to be more reasonable than maintaining the current level, Cuc said.
For nearly six months, Nguyen Thi Lan Huong, owner of an apartment in Hanoi, has not been able to find tenants even though she has reduced the rent by almost 50% due to the Covid pandemic. 19.
According to Huong, the taxable income threshold of 100 million dong per year is low and needs to be raised to a higher level due to the impact of additional expenses such as maintenance and insurance costs and depreciation of fixed assets.
“If the tax rate is high, the rental price will also be pushed up, which will make it more difficult to rent. Hope there is a reasonable tax rate to harmonize the lessor and the lessee, ”Huong told Vietnam Television (VTV).
As for tenants like Nguyen Thanh Hien in Hanoi, she also wants the tax to be reduced so that the rent can be lower because the tax is always included in the rent and ultimately the tenant has to pay this tax.
Lan of the GDT said existing regulations did not take into account additional expenses related to real estate leasing activities such as maintenance, installation costs and interior fittings.
Therefore, the tax policy provides for a lower tax rate for individuals than for businesses. More specifically, the value added tax is 5% for individuals and 10% for businesses. Personal income tax is 5% for individuals and 20% for businesses.
VIET NAM NEWS / ASIA NEWS NETWORK