The main reason behind the General Department of Taxation's tightening of personal income tax collection on real estate transfer transactions is the inaccurate declaration of personal income tax by some individuals regarding real estate transactions.
The General Department of Taxation is determined to bring the transfer of houses and land into order.
The General Department of Taxation has issued Official Letter No. 3122/TCT-TTKT on strengthening tax management. Accordingly, the General Department of Taxation requests the Tax Departments of provinces and centrally-administered cities to strictly implement the guidelines in Official Letter No. 3841/TCT-TTr dated October 9, 2018.
The main reason is that recently, several media articles have reported on the situation where some individuals in provinces such as Ho Chi Minh City, Hanoi, and Khanh Hoa have declared incorrect taxable prices for real estate transfer transactions, or declared taxable prices for future real estate that are significantly lower than the actual transaction prices of similar properties being sold by the project owner.
The practice of selling properties at "two prices" is becoming increasingly widespread in projects ranging from commercial apartments to townhouses, terraced houses, and subdivided land plots. This creates a discrepancy between the actual value and the price stated in the sales contract, sometimes amounting to hundreds of millions or even billions of dong.
Mr. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, commented that the practice of buying and selling houses at two different prices carries legal risks when the contract is declared invalid by the court, and the buyer only pays the seller the amount stated in the transaction contract.
To mitigate this situation, on the one hand, the General Department of Taxation requires the Tax Departments of provinces and centrally-administered cities to strictly implement the previously established regulations, and on the other hand, emphasizes... The responsibility of tax authorities is to collect and consolidate complete documentation and legal grounds, and to specifically determine the price difference and the amount of underdeclared tax. compared to regulations when transferring files for coordination with the police and other relevant agencies.
In cases where there are signs of legal violations as stipulated, the tax authorities must transfer the files to the police for handling according to regulations.
