Do I have to pay tax if I earn less than 100 million VND/year from renting a house?

Tax is a compulsory revenue to the State budget, prescribed by law for economic organizations and members of society. Paying tax is an obligation of taxable entities according to regulations.

As scheduled, the personal income tax settlement season is about to begin. The deadline for submitting personal income tax settlement documents this year is May 4.

Many readers have asked questions about whether individuals who rent out houses with a total annual revenue of less than 100 million VND have to pay taxes.

According to Circular 100/2021 of the Ministry of Finance , individuals who rent out houses with a total annual revenue of less than 100 million VND are subject to tax declaration and do not have to pay personal income tax or value added tax. The determination of individuals who do not have to pay tax is the total revenue generated in the calendar year from property rental contracts.

Landlords with annual revenue of 100 million VND or less do not have to pay tax (Illustration: Ha Phong).

In case of renting a house with revenue of over 100 million VND/year, tax must be paid. The tax rate for individuals renting houses, premises in particular and renting assets in general in case of total revenue greater than 100 million VND/year is 10% of revenue (5% personal income tax + 5% value added tax).

In case the lessee pays in advance for many years, when determining the revenue level from 100 million VND/year or less to determine not to pay personal income tax, value added tax is the one-time paid revenue allocated according to the calendar year.

For example: Individual Nguyen Van A signs a house lease contract for 2 years (calculated as 12 consecutive months, with the rental period from October 2021 to the end of September 2023), the rent is 10 million VND/month and is paid in one lump sum. Thus, taxable revenue and tax payable on one-time revenue from house rental activities are determined as follows:

- In 2021, A rented out a house for 3 months (from October to the end of December) with rental revenue of 3 months x 10 million VND = 30 million VND. Therefore, in 2020, A does not have to pay personal income tax or value added tax.

- In 2022, A rented out a house for 12 months (from January to the end of December), with rental revenue of 12 months x 10 million VND = 120 million VND. Therefore, in 2021, A must pay personal income tax and value added tax.

- In 2023, A rents out a house for 9 months (from January to the end of September), with rental revenue of 9 months x 10 million VND = 90 million VND. Therefore, in 2023, A does not have to pay personal income tax or value added tax.

After determining the taxable revenue of each year, A makes a one-time tax declaration with a one-time payment revenue of 240 million VND. The revenue that generates the tax A must pay is 120 million VND, the one-time tax to be paid for the entire contract is 120 million VND x (5% + 5%) = 12 million VND.

Source: https://dantri.com.vn/kinh-doanh/cho-thue-nha-thu-ve-duoi-100-trieu-dongnam-co-phai-dong-thue-khong-20230325003138398.htm