DETERMINATION OF LICENSE FEES FOR PERSONS WITH MULTIPLE HOUSES FOR RENT

The lessor is obliged to pay the license fee when reaching a certain amount of revenue. To pay the correct fee, business households and individuals must determine the revenue for calculating license fees. So how do you determine the revenue to use as a basis for calculating license fees for individuals? Within the limits of this article, QPT Tax Agent only deals with the declaration and payment of License Fees in case an individual has many rental houses.

Circular 302/2016/TT-BTC (hereinafter referred to as “Circular 302”) issued by the Ministry of Finance on November 15, 2006, clearly defines the license fee charged for each business location, the lease contract, and specify the license fee based on the rental revenue under the contract. However, because the instructions are not clear, the application and declaration are different.
On July 9, 2020, the Ministry of Finance issued Circular No. 65/2020/TT-BTC (hereinafter referred to as “Circular 65”) to guide the calculation of revenue as a basis for determining fee levels. Subjects.

Currently, individuals who rent houses must declare and pay 3 taxes, that is:
        • Course fees: The default tax filing and payment period is calendar year, and
        • PIT and VAT: You can choose to declare and pay tax according to the payment period on the lease or by the calendar year.

DECLARATION AND PAYMENT OF LICENSE FEES IN CASE OF PERSONAL HOMES FOR LEASE

If an individual has more than one rental house, that individual is obliged to declare and pay the license fee for each contract at the district tax office managing each rental house. That is, if an individual has 3 houses in 2 different localities, the individual must declare and pay tax 3 times for 3 rental contracts at 2 district tax offices managing these 3 houses.

About License fee payable for each rental contract, Circular 302 guides the calculation of license fees for each contract as follows:

Rental revenue
(VND/year)
License fee
(VND/year)
Over 500 million VND 1.000.000
Over 300 million to 500 million VND 500.000
Over 100 million to 300 million 300.000
Under 100 million Don't pay

However, because Circular 302 does not clearly guide how to calculate rental revenue as a basis for calculating license fees, leading to many different interpretations. Therefore, Circular 65 clearly guides How to calculate revenue as a basis for calculating license fees :
The turnover used as a basis for determining the rate of license fee collection for individuals engaged in property leasing activities is the personal income tax revenue of the property lease contracts of the tax year.
In case an individual has multiple property lease contracts at one location then: the revenue used as a basis for determining the license fee rate for that location is the total revenue from property lease contracts in the tax year.
In case individuals lease properties at multiple locations the revenue used as a basis for determining the rate of license fee collection for each location is the total revenue from property lease contracts of locations in the tax year, including the case at a location with There, are many property lease contracts.
=> Thus, it can be understood that the revenue used as a basis for calculating license fees is the revenue of all lease contracts arising in the year.= Thus, it can be understood that the revenue used as a basis for calculating license fees is the revenue of all lease contracts arising in the year.

Reality: From the point of view of the tax agent QPT, the provisions of Circular 65 are clearer and more convenient for collection, but when applied in practice, there will be some points to discuss:
Case 1: Personally have 2 apartments for rent in 2 localities. Suppose 1 unit has sales of 100 million dongs, the other has a revenue of 500 million dongs. Thus, the license fee to be paid to the tax authority for each apartment is 1 million dongs, although the revenue of unit 1 is only 1/5 of the second.
Case 2: 2 individuals with the same rental revenue of 600 million. Individual A has only 1 house for rent, he only pays a license fee of 1 million, while individual B has 3 apartments (each with a turnover of 200 million) and must pay a license fee of 3 million (1 million / unit). X 3 units).
Case 3: In fact, at present, the declaration and payment of house tax are usually authorized for the rental business because the enterprise wants to protect the deductible rental cost when calculating tax. It is unacceptable for businesses to require landlords to provide the entire rental contract of all rental properties to have a basis for declaring revenue to calculate license fees.
Case 4: Suppose the business rents a house as an office at VND 80 million/year. In the contract, the business is obliged to declare and pay taxes on behalf of the owner. Because the rental revenue is 80 million VND, the taxable threshold is 100 million VND, so the Enterprise does not declare and pay the license fee as well as VAT and PIT. However, the landlord then leases another apartment to another business, assuming at 60 million/year. At that time, the revenue used as a basis for calculating license fees is 140 million and the license fee to be paid for each unit is 300,000/year. According to Article 4, Circular 96/2015/TT-BTC: “In case an enterprise leases the property from an individual and in the property lease contract there is an agreement that the enterprise shall pay tax on behalf of the individual, the dossier to determine the expenses shall be Deductible fees are property lease contracts, rental payment documents and tax payment documents on behalf of individuals. Thus, in this case, the Enterprise bears the risk that the rental cost of 80 million VND cannot be deducted when calculating CIT because there is no proof of payment for the 300,000 VND license fee to the landlord.



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