TIGHTENING TAX COMPLIANCE IN PROPERTY LEASING – PROPERTY OWNERS MUST TAKE RESPONSIBILITY

1. Mandatory Obligations for Leasing Activities

When entering into a lease contract, individuals or household businesses must fulfill the following key obligations:

• Register for a business license or a taxpayer identification number (TIN) within 10 days of commencing the lease.

• Declare taxes properly and on time using the correct forms—even if income is below the taxable threshold.

• Pay all required taxes if revenue exceeds the non-taxable threshold.

Note: From January 1, 2026, under the new VAT Law No. 48/2024/QH15, the non-taxable income threshold will increase from VND 100 million to VND 200 million/year.

2. Common Mistakes

• Misunderstanding “no tax liability = no tax declaration” → Incorrect. Declaration is still mandatory to ensure transparency.

• Calculating tax based only on pre-tax contract value → Incorrect. Taxable revenue must be grossed-up to include VAT, even if the contract states “exclusive of tax”.

3. Applicable Penalties

• Late registration for TIN: Fine from VND 750,000 to VND 4,000,000.

• Late tax declaration: Fine from VND 3,500,000 to VND 10,000,000.

• Late tax payment: In addition to the tax due, late payment interest of 0.03%/day is applied.

• Tax evasion: Penalty ranges from 1 to 3 times the amount of tax evaded.

These penalties show that any delay or negligence in tax declaration or payment is far from a safe option.

In practice, many property owners—especially the elderly or those unfamiliar with digital platforms—find it difficult to manage tax procedures online. However, from a policy standpoint, stricter management is necessary to ensure fairness and transparency.

Therefore, property owners must be proactive and compliant, rather than waiting until the tax authority imposes penalties. This approach helps minimize financial risks and safeguards one’s reputation and peace of mind in the long term.

TPM’s Recommendations

To ensure full tax compliance:

• Promptly register for a TIN as soon as leasing activity begins.

• Declare taxes on time, even if income is below the taxable threshold.

• Pay all applicable taxes and fees when revenue exceeds the threshold.

TPM Tax Agency is ready to support you throughout the entire process—from registration and declaration to payment.

Comply Early – Comply Properly – Avoid Unnecessary Risks

For detailed consultation, please contact TPM via our website or hotline (+84) 28 3505 1800 for prompt assistance.