WHEN DOES ENTERPRISES HAVE TO PAY TAX ON INDIVIDUALS FOR RENT?

1. Conditions for an enterprise to pay tax on behalf of the lessor:

Enterprises and economic organizations (hereinafter collectively referred to as enterprises) are responsible for tax deduction, tax declaration and payment on behalf of property lessors including value added tax (hereinafter referred to as “VAT”) and personal income tax (hereinafter referred to as “personal income” for short) when fully meeting the following two conditions:
– Individuals signing property lease contracts with enterprises;
– In the lease agreement, the lessee (enterprise) pays the tax on behalf of the lessee.

* Legal grounds: Clause 2, Article 8 of Circular 92/2015 / TT-BTC

2. Responsibility to withhold taxes, declare and pay taxes on behalf of individuals

2.1. Regarding deduction of VAT and PIT
In the calendar year, when an individual earns more than VND 100 million from a property lease, the enterprise shall deduct VAT and PIT before paying the rent to the individual.
In case an individual earns revenue from multiple places in the year, he expects or can determine the total revenue of over VND 100 million / year, he / she may authorize it in accordance with law for the enterprise to declare and submit on his behalf. for contracts of VND 100 million / year or less at the unit.

The deductible tax amount is determined as follows:

Payable VAT amount = Turnover for calculating VAT x VAT rate of 5%
Payable PIT amount = Turnover taxable income x PIT rate of 5%
Inside:

Taxable revenue is determined from the beginning of each payment period on a lease contract, specifically:

– The revenue subject to VAT from the property leasing activities is the taxable turnover (in case of taxable) of the rent paid by the lessee according to the lease contract and other amounts excluding the amount fines and compensation received by the lessor as agreed in the lease.
– Revenue subject to PIT from the leasing of assets is the taxable revenue (in case of taxable) of the rent paid by the lessee according to the lease contract and other revenues including fines. , compensation received by the lessor as agreed in the lease.
– In case the lessee pays rent in advance for many years, the revenue subject to VAT and PIT shall be determined according to the lump sum payment.

2.2. File and pay taxes
A tax declaration dossier for an asset lease activity of an individual consists of:
– A declaration form, made according to form No. 01 / TTS enclosed with Circular 92/2015 / TT-BTC;
– Appendix using the form No. 01-1 / BK-TTS issued together with Circular 92/2015 / TT-BTC;
– A copy of the lease contract, contract Appendix (if it is the first tax return of the contract or contract annex).
If the business declares tax on behalf of the lessor, the declaration shall add “Declaration instead” in the preceding section of the phrase “Taxpayer or the lawful representative of the taxpayer” and the declarant must clearly sign and state them. If the name is an organization, instead of signing, the seal must be affixed with the seal of the organization according to regulations.
On the tax records, tax receipts must still show that the taxpayer is the property leasing individual.

Deadline for submitting tax declaration documents:
– For individuals who declare tax according to the latest payment deadline, it is the 30th (thirty) day of the quarter succeeding the quarter in which the lease term begins.
– For individuals who make a single tax return by the year no later than the 90th day (ninety) from the end of the calendar year.

Places for submitting tax returns: Sub-departments of taxation where properties are leased
Deadline for paying tax is the same as the deadline for submitting tax declarations (i.e., declaring and paying tax at the same time).

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