Legal News

[Taxation] Taxable Income from Lease of Personal Property

2024/04/17

The GDT issued Official Letter No. 1368/TCT-DNNCN dated April 3, 2024 guiding on taxable income from renting personal assets*.

In accordance with Article 4, paragraph 2 of Circular No. 92/2015/TT-BTC and Article 10 of Circular No. 40/2021/TT-BTC, it should be noted that taxable income for VAT and personal income tax purposes is taxable income including tax.

If the rental of personal property is stipulated in the contract as a price excluding tax, the tax authority shall recalculate the taxable income for VAT and PIT by dividing the income excluding tax by 0.9. Whether the borrower or the lender is responsible for submitting tax returns and paying taxes can be determined by agreement between the two parties in accordance with the Civil Code, and this should be indicated in the contract.

*This refers to personal assets such as real estate, automobiles, machinery, etc. However, “cash” is not included.

References:
Official Letter No. 1368/TCT-DNNCN dated April 3, 2024 of the Directorate General of Taxation
Article 4, paragraph 2 of Circular No. 92/2015/TT-BTC
Article 10 of Circular No. 40/2021/TT-BTC