IN WHICH CASE DO INDIVIDUALS LENT PROPERTY NOT HAVE TO PAY PERSONAL INCOME TAX OR VALUE ADDED TAX?

Individual revenue arising from property rental activities will be subject to personal income tax. However, there will be some cases where individuals do not have to pay personal income tax or value added tax. Through today’s article, let’s learn about this issue with Pham Consult!

According to the provisions of Point a, Clause 1, Article 9 of Circular 40/2021/TT-BTC, an individual who leases property is an individual who generates revenue from property rental, including:

– Renting houses, premises, shops, factories, warehouses does not include accommodation services;

– Rental of means of transport, machinery and equipment without a driver;

– Renting other properties without services.

Accommodation services not included in property rental activities according to the instructions in this clause include:

– Providing short-term accommodation facilities for tourists and other visitors;

– Providing long-term accommodation facilities other than apartments for students, workers and similar subjects;

– Providing accommodation facilities with food services or entertainment facilities.

In the case of individuals leasing property, they do not have to pay personal income tax or value added tax as prescribed in Clause 1, Article 9 of Circular 40/2021/TT-BTC (amended by Clause 3, Article 1 of the Circular). 100/2021/TT-BTC) as follows:

Tax calculation method for some special cases

1. Individuals renting property

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b) Individuals who lease property declare tax each time a payment period arises (each time a payment period arises is determined by the starting time of the rental term of each payment period) or declare tax by positive year. calendar. Individuals declare tax according to each contract or declare tax for multiple contracts on one declaration if the rental property is in an area managed by the same tax agency.

c) Individuals only have property rental activities and the rental period is not a full year. If they generate rental revenue of 100 million VND/year or less, they are not required to pay VAT or personal income tax. . In case the lessee pays property rent in advance for many years, the level of revenue to determine whether an individual must pay tax or not is the one-time revenue distributed according to the calendar year.

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Thus, according to regulations, individuals leasing property do not have to pay personal income tax or value added tax if:

– That individual only has property rental activities and the rental period is not a full year;

– Generating rental revenue of 100 million VND/year or less.

Note: In case of having to pay personal income tax or value added tax, the individual leasing the property must declare tax each time a payment period arises (each time a payment period arises is determined by the time of the payment period). beginning of the rental term of each payment period) or tax declaration by calendar year.

Individuals can declare tax according to each contract or declare tax for multiple contracts on one declaration if the rental property in the area is managed by the same tax agency.

In case the lessee pays money in advance for many years, how does the individual leasing the property pay taxes?

Pursuant to Point d, Clause 1, Article 9 of Circular 40/2021/TT-BTC stipulates as follows:

Tax calculation method for some special cases

1. Individuals renting property

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d) In case the lessee pays money in advance for many years, the individual leasing the property declares and pays tax once for the entire prepaid revenue. The tax amount payable at one time is the total tax amount payable for each calendar year according to regulations. In case there is a change in the content of the asset lease contract leading to a change in taxable revenue, payment period, or lease term, the individual must declare adjustments and supplements according to the provisions of the Law on Tax Administration for Tax period changes.

2. Individuals who directly sign contracts to act as lottery agents, insurance agents, and multi-level marketing agents

a) An individual who directly signs a contract to act as a lottery agent, insurance agent, or multi-level marketing agent is an individual who directly signs a contract with a lottery enterprise, insurance enterprise, or multi-level marketing enterprise. Provided in the form of agents selling at the right price.

b) Individuals who directly sign contracts to act as lottery agents, insurance agents, or multi-level marketing agents do not directly declare taxes, except for the instructions in Point d of this Clause. Lottery businesses, insurance businesses, and multi-level marketing businesses are responsible for withholding and declaring and paying personal income tax if the business determines that the amount of commission paid to individuals at the unit in the calendar year is over 100 million dong. In cases where an individual generates revenue of 100 million VND/year or less in many places during the year, and the individual expects or determines a total revenue of over 100 million VND/year, he/she can authorize revenue payment organizations. Enter tax deduction for commissions received at the unit during the tax year.

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Accordingly, in case the lessee pays money in advance for many years, the individual leasing the property declares and pays tax once for the entire prepaid revenue.
The tax amount payable at one time is the total tax amount payable for each calendar year according to regulations. Hope the above information will help your work.

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