In order to facilitate the effective imposition of personal income tax (PIT) as requested by the Prime Minister, especially specific cases involving real estate, the Finance Ministry on August 12 issued Circular No. 161/2009/TT-BTC to guide PIT on transfer, inheritance or receipt of real estate given as gifts, in furtherance of Circular No. 84/2008/TT-BTC of September 30, 2008.
Apart from the cases eligible for PIT exemption or temporary non-collection specified in Clauses 1 thru 5, Section III, Part A of Circular No. 84, persons or households contributing their land use rights or house ownership right as capital for founding enterprises or increasing their enterprises’ capital; and recipients of compensations for land recovery by the State, including compensations or supports provided by other entities upon land recovery under Government Decrees No. 197/2004/ND-CP of December 3, 2004, and No. 17/2006/ND-CP of January 27, 2006, on compensations and supports for resettlement upon land recovery by the State will also be eligible for temporary non-collection of PIT.
From September 26, PIT exemption will also be given to transferors of houses or right use residential land and assets to attached to land in cases they have only one house or land use right in Vietnam.
Two methods of taxation will apply to the transfer, inheritance or receipt of real estate given as gifts: 25% of taxable income in cases there are sufficient valid documents for determining transfer and cost prices; or 2% of the transfer price in cases it is impossible to ascertain real estate cost prices and related expenses for determining taxed incomes.