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The Ministry of Finance is considering introducing a tax rate of 20 per cent on gains from real estate transactions as part of its review for personal income tax reforms. — VNA/VNS Photo Tuấn Anh |
HÀ NỘI — The Ministry of Finance is considering introducing a tax rate of 20 per cent on gains from real estate transactions, as part of its review into personal income tax reforms.
The proposal is outlined in the ministry’s recent report sent to the National Assembly, in which two methods for calculating tax on property transfers are under consideration.
The first method is imposing a 20 per cent tax rate on the actual profit, equivalent to the existing corporate income tax. The second method is imposing a flat rate on total transaction value expected at around 2 per cent.
The ministry said that the selection of tax calculation method will depend on the availability of data.
To apply the 20 per cent tax rate on gains, it is necessary to have reliable data to verify buying and selling prices together with other expenses. In case it is unable to verify data, a simpler 2 per cent tax rate on the total transaction value is considered.
Under the current regulations, individuals pay a flat 2per cent tax rate on the transaction value regardless of whether the transaction yields a profit or not. This often leads to underreporting of sale prices to reduce the tax payable, causing losses to the State budget and lack of transparency in the real estate market.
A representative from the ministry said that it is necessary to develop a robust national property database in order to better tax the property market. — VNS