The new tax rate was stipulated in Circular 113/2011/TT-BTC, recently issued by the Ministry of Finance. The circular also outlines ways to calculate personal income tax including income tax on real estate transactions.
Under the new circular, organisations and individuals paying commissions, salaries, wages and other service charges valued at more than 1 million VND per transaction will have the tax deducted before paying their general income tax. Deductions are applied at a rate of 10 per cent for individuals who have tax file numbers and 20 per cent for those without tax file numbers.
Purchasing contracts for houses or apartments signed before Decree 71/2010/ND-CP on the implementation of the Law on Housing came into effect on 23 June, 2010, have to pay 25 per cent of their personal income tax.
For the transfer of purchasing contracts on housing to be built in the future, people making tax declarations will be subject to a tax of 25 per cent on their income.
Source: Vietnam Investment Review