HOW TO CALCULATE PERSONAL INCOME TAX ON LAND SALE 2022
OUTLINES
1. Regulations on personal income tax on land sales.
2. How to calculate personal income tax on land sale.
3. Personal income tax declaration dossiers for land sale.
4. Penalty for late payment of personal income tax on land sale.
According to the law on personal income tax, in which, the transfer of land use rights (land sale) is one of the types subject to PIT. However, calculating personal income tax on land sales is not easy at all, in which, the application of tax rates, land transfer prices and personal income tax declaration dossiers for land sales have many new regulations. In addition, taxpayers paying tax lately will be administratively sanctioned. The following article will analyze this content, introduce some new legal provisions on late tax payment to help readers understand the necessary information.
Income from selling land is subject to personal income tax (Illustration).
- Regulations on income from selling land subject to PIT
- According to Clause 1, Article 1 of the 2012 Law on Personal Income Tax, which stipulates that incomes from real estate transfer are subject to personal income tax, including: transfer of land use rights and properties attached to land; transfer the right to rent land, right to rent water surface; transfer of ownership or use of houses and other transfers related to real estate.
- According to Clause 5, Article 2 of Circular No. 111/2013/TT-BTC guiding income from real estate transfer as follows:
- For land-attached assets, including houses, including houses to be formed in the future; infrastructure design and construction works attached to the land, including future constructions; Other assets attached to land include agricultural, forestry and fishery products.
- Income from capital contribution in real estate to establish an enterprise or increase capital for production and business; Income from the authorization to manage real estate in which the authorized person has the right to transfer such real estate or has the same rights as the owner of the real estate according to regulations, is also considered a type of income subject to personal income tax.
- Thus, income arising from the sale of land is income subject to personal income tax as prescribed by law.
- Cases of land sale not subject to PIT.
- Pursuant to Article 3 of Circular 111/2013/TT-BTC, the following cases are exempt from personal income tax when transferring land and house use rights:
- These cases are not subject to personal income tax: grandfathers and grandmothers sell land to their grandchildren; natural fathers and mothers sell land to their biological children; adoptive parents, adoptive mothers sell land to their adopted children; father-in-law, mother-in-law sell land to daughter-in-law; father-in-law, mother-in-law sell land to son-in-law; husband and wife sell land to each other; Siblings sell land to each other.
- If an individual has only one house and the right to use residential land in Vietnam, when selling land, he or she is not subject to PIT.
- For the above cases, although they are exempt from PIT, when individuals sell land, they still have to declare tax for the State to manage.
How to calculate personal income tax on land sale
- The formula for personal income tax on land sale:
- Tax rate 2% x Land sale price = Personal income tax payable
- In which:
- The 2% tax rate for land sales is 2% of the land sale price
- The selling price of land is determined as follows:
- Based on the price stated in the land sale contract at the time of land sale to determine the land sale price (note: non construction land)
- If the land sale contract does not specify a specific price or the price stated in the land sale contract is lower than the price set by the provincial-level People's Committee at the time of land sale, the determination of the land sale price shall be based on the land price list provided by Provincial-level People's Committees at the time of land sale.
- In case, when selling land on which there are constructions, houses, including construction works in the future, we will base on the price stated in the land sale contract at the time of land sale. If the land sale contract does not state the price or the land price on the land sale contract is lower than the price set by the provincial-level People's Committee, the land sale price shall be based on the land price list submitted to the provincial-level People's Committee as prescribed in Clause 1 of this Article at the time of land sale.
- The time to calculate tax from land sale is determined:
- If the land sale contract does not agree that the buyer is the taxpayer on behalf of the seller, the time the land sale contract takes effect in accordance with the law is the time for tax calculation.
- If the land sale contract has an agreement that the buyer is the taxpayer on behalf of the seller, the time to carry out procedures for registration of land ownership and use rights is the time of tax calculation.
- If the land is sold but there are works on the land, houses on the land, including future works, the time when the individual submits the tax return to the tax office is the time for tax calculation.
- A dossier of PIT declaration for land sale shall comply with Decree 126/2020/ND-CP, including the following papers: PIT declaration form No. 03/Real Estate-TNCN; Identity card/Citizen identity card (copy); Papers related to the land for sale (Certificate of land use rights, papers proving ownership and use rights related to the land for sale and these papers are copies); Land sale contract. In case they are tax-exempt subjects, they must have papers proving that they are exempt from tax according to regulations.
- In case the tax authority needs the original papers for comparison, the tax payer shall present the original for comparison.
- After submitting the tax return, the tax office will calculate, print and send a notice to the taxpayer. Based on the content of the notice, the taxpayer is obliged to pay the full amount and on time on the notice.
- According to Article 13 of Decree 125/2020/ND-CP stipulating penalties for violations on the deadline for submitting tax declaration dossiers. Accordingly, depending on the deadline for filing tax returns, there are different fines, for example, if the tax return is submitted overdue from 01 day to 30 days, the fine will be from VND 2 million to VND 5 million; If the tax return is submitted beyond the deadline from 31 days to 60 days, a fine of between VND 5 million and VND 8 million will be imposed.
- According to Clause 1, Article 42, Article 42 of Decree No. 125/2020/ND-CP, which stipulates that the payer of fines for tax administrative violations, the late payment fine shall be calculated at the rate of 0.05%/day based on the late payment fine.
➤ More articles:
➤ Conversion of land use rights according to Vietnamese law. .
➤ Where do I submit the PIT finalization file?
➤ Cases in which personal income tax documents are issued..
➤ The role of personal income tax.
- Here is the content of some regulations on how to calculate personal income tax on land sales in 2022 of Thinh Tri Law Firm sent to readers. If you have any questions, please contact Hotline 1800 6365 for advice.
