DO I HAVE TO PAY PERSONAL INCOME TAXE WHEN GIVEN THE LAND-USE RIGHT?

I was given a land plot by my younger brother. When I come to the tax authority to pay tax for registering land-use rights, I was asked to pay both personal income tax and registration fee. I would like to ask if the requests of the tax authority is lawful. Thank you in advance.

FDVN’s opinions:

Thank you for concerning FDVN’s legal services. Regarding your consulting requests, after studying the relevant legal documents, FDVN Law Firm would like to give you the following advice:

[1]. Legal provisions on personal income tax when giving land-use rights:

Personal income tax is a tax on the portion of income higher than the starting level of taxable income. Accordingly, personal income tax is the amount of money that the income earners must deduct from their salary or other income and pay to the state budget. Under the current regulations on personal income tax, income from real estate transfer is taxable income. However, there are some objects given land use rights, ownership of houses or assets attached to land, right to rent land or water surface are exempt from personal income tax.

According to Clause 1, Clause 2, Clause 4 of Article 4 Law on Personal Income Tax 2007 amended and supplemented in 2014 on income exempt from tax:

“1.  Incomes from transfer of real estate between spouses; parents and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among blood siblings.

2. Incomes from transfer of residential houses, rights to use residential land, and assets attached to residential land received by individuals who have only one residential house or land plot each.

[…]

4. Incomes from receipt of inheritances or gifts that are real estate between spouses, parents and their children; adoptive parents and their adopted children; fathers-in-law or mothers-in-law and daughters-in-law or sons-in-law; grandparents and their grandchildren; or among blood siblings..”

Thus, if you fall into the case mentioned above, you are exempt from personal income tax.

[2]. Law provisions on registration fee:

According to Clause 10, Article 9 of Decree No. 140/2016/NĐ-CP of the Government on waiver of registration fee:

“10. Real property inherited or donated between spouses; parents and biological children; parents and adopted children; parents and daughters-in-law; parents and sons-in-law; paternal or maternal grandparents and grandchildren; biological siblings, and certified by competent government authorities with regard to land use right and ownership of housing and property attached to the land..”

Land and house are subject to the registration fee. Individuals transferring land use rights; houses and other land-attached assets and carrying out the conveyance procedure must pay the registration fee, except the cases mentioned above.

Above is FDVN Law Firm's opinion for your consulting requests based on studying the relevant legal provisions. Hopefully, FDVN's advice would be helpful to you.

Dinh Thi Thong - FDVN Law Firm

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