VI How to determine taxable revenue from property rental for individuals under Decree 68? Let’s explore this further with Pham Consult!
Guidelines for determining taxable revenue from property rental for individuals under Decree 68/2026/ND-CP?
Based on the provisions of Article 5 of Decree 68/2026/ND-CP guiding the determination of taxable income for personal income tax purposes for property rentals by business households and individual businesses as follows:
Revenue for determining personal income tax
- Revenue is the total amount of money from sales, processing fees, service provision fees, including subsidies, surcharges, and additional fees received by business households and individual businesses, regardless of whether the money has been collected or not; including bonuses received, amounts received from sales support, promotions, payment discounts, support received in cash or in kind, compensation for breach of contract, other compensation related to business activities, and other revenue received by individual businesses, regardless of whether the money has been collected or not, excluding trade discounts, sales price reductions, and the value of returned goods.
- Revenue for certain cases is specifically defined as follows:
- d) For property rental activities, it is the amount the lessee pays each period according to the rental contract. If the lessee pays in advance for several years, the revenue for calculating taxable income is allocated over the number of years for which the payment was made in advance or is determined based on the lump-sum payment;
Thus, the taxable income for personal income tax on property rental for individuals engaged in business is the amount the lessee pays each period according to the rental contract.
If the lessee pays in advance for several years, the revenue for calculating taxable income is allocated over the number of years for which the payment was made in advance or is determined based on the lump-sum payment.
How is personal income tax calculated for individuals engaged in real estate rental business?
Based on Article 4 of Decree 68/2026/ND-CP, individuals engaged in business with annual revenue of VND 500 million or less are not required to pay personal income tax.
In cases where annual revenue exceeds 500 million VND, tax payment shall be made according to the provisions of Article 7 of the Personal Income Tax Law 2025 as follows:
Personal income tax on income from business activities
- Resident individuals engaged in production and business activities with annual revenue of 500 million VND or less are not required to pay personal income tax. The Government shall submit to the Standing Committee of the National Assembly a proposal to adjust the revenue threshold for exemption from personal income tax to suit the socio-economic situation in each period.
- Personal income tax on income from business activities of resident individuals with annual revenue exceeding the threshold specified in Clause 1 of this Article shall be determined by multiplying taxable income by the tax rate. In which:
- Individuals renting out real estate, excluding accommodation business activities, shall pay personal income tax determined by multiplying the revenue exceeding the threshold specified in Clause 1 of this Article by a tax rate of 5%.
Thus, for individuals engaged in the business of renting out real estate, personal income tax is determined as follows: By the portion of revenue exceeding 500 million VND (x) with a tax rate of 5%:
– In cases where an individual owns multiple real estate properties for rent in different locations, the individual is allowed to deduct 500 million VND before calculating personal income tax for one or more real estate rental contracts of the individual’s choice, but the total deduction cannot exceed 500 million VND per year for all real estate rental contracts.
If the selected real estate rental contract has not yet deducted the full 500 million VND, the individual may continue to choose other real estate rental contracts to deduct until the full 500 million VND is deducted;
– In cases where an individual owns multiple rental properties in different locations and the lease agreement stipulates that the lessee will declare and pay taxes on their behalf, when selecting a rental contract to apply the tax deduction for personal income tax purposes, both the lessor and the lessee must clearly specify in the lease agreement the provisions for tax declaration and payment on behalf of the lessee, and the amount deductible for personal income tax purposes.
If the rental contract stipulates tax declaration and payment on behalf of the lessee but the deduction is not yet 500 million VND, the individual may continue to choose other rental contracts to continue the deduction until the full 500 million VND is deducted.
Regulations on VAT and personal income tax declaration and payment for individuals starting a new business?
Regulations on tax declaration and payment of VAT and personal income tax for newly established businesses are implemented according to Article 9 of Decree 68/2026/ND-CP as follows:
[1] Individuals conducting business who start production and business activities in the first 6 months of the year with actual revenue of VND 500 million or less must notify the directly managing tax authority of the actual revenue generated from the start of production and business activities until June 30th no later than July 31st, and notify the actual revenue generated in the last 6 months of the year no later than January 31st of the following calendar year.In the case of individuals conducting business who start production and business activities in the last 6 months of the year with actual revenue of VND 500 million or less, they must notify the actual revenue generated no later than January 31st of the following calendar year.
[2] Individuals who have just started production and business activities, when their cumulative revenue exceeds 500 million VND, shall declare taxes quarterly as prescribed in Article 10 of Decree 68/2026/ND-CP from the quarter in which revenue exceeds 500 million VND. [3] From the following year, individuals with actual revenue of 500 million VND or less shall notify the revenue as prescribed in Article 8 of Decree 68/2026/ND-CP; in case of actual revenue exceeding 500 million VND, they shall declare taxes as prescribed in Article 10 of Decree 68/2026/ND-CP.