In cases where individuals sign a contract to purchase an apartment, and during the project's implementation, due to delays in construction, the individual terminates the contract, the company refunds the contributed capital and compensates the individual with a sum of money as per the signed contract. However, the aforementioned compensation amount is not specifically and detailedly stipulated in the 10 categories of taxable income as regulated by the Personal Income Tax Law and its implementing regulations. Therefore, individuals are not required to pay personal income tax on this received income.
In response to Official Letter No. 4854/CT-TTHT dated February 14, 2017, from the Hanoi City Tax Department regarding clarification of tax policies, the General Department of Taxation has the following opinion:
The Personal Income Tax Law only stipulates 10 types of taxable income, including: Income from business; Income from salaries and wages; Income from capital investment; Income from capital transfer; Income from real estate transfer; Income from lottery winnings; Income from royalties; Income from franchise fees; Income from inheritance; and Income from gifts.
Therefore, in the case where individuals sign a contract to purchase an apartment with HIBRAND VN Co., Ltd., and during the project implementation, due to construction not progressing according to schedule, the individual terminates the contract, the company refunds the contributed capital and compensates the individual with an amount as per the signed contract. The aforementioned compensation amount is not specifically and detailedly stipulated in the 10 taxable income categories under the Personal Income Tax Law and its implementing regulations, therefore, the individual is not required to pay personal income tax on the received income.
See more: 1873_tct-tncn_348817
