Taxes & financial duties for foreigners renting property in Vietnam

Monday - 21/07/2025 09:11

Understand taxes & financial duties for foreigners renting property. explore tax obligations, compliance, & reporting for seamless transactions.

Taxes and Financial Obligations When Renting to Foreigners

In the context of increasingly deep international economic integration, renting houses to foreigners has become a common activity, providing a stable source of income for many individuals and households. However, along with this comes the financial obligations that homeowners need to understand to comply with the law and avoid unnecessary risks. This article will provide an overview and detailed information about the types of taxes and financial obligations that arise when renting houses to foreigners in Vietnam.

Taxes & financial duties for foreigners renting property in Vietnam

Troubles From a Lack of Understanding About Housing Rental Taxes

Do you have an apartment or townhouse and want to rent it to foreigners to earn extra income? That's a great idea, but do you really understand the taxes and financial obligations associated with this activity? Many homeowners often overlook or do not fully understand tax regulations, leading to undesirable consequences such as:

1. Being fined for declaring and paying taxes incorrectly or late.

2. Being subject to tax arrears due to insufficient or inaccurate declaration.

3. Encountering difficulties in working with tax authorities.

4. Losing credibility and future cooperation opportunities.

5. Spending time and money resolving legal issues related to taxes.

Lack of knowledge about taxes not only causes financial troubles but also affects your psychology and business operations. You will always feel worried and insecure when you are not sure whether you have complied with the law.

Agitation: Landlords’ Worries When Renting Out Their Houses

Imagine you have just signed a house rental contract with a foreign customer at an attractive price. You are happy to have a stable source of income. But then, you start hearing about the "bitterly funny" stories of friends who also rent out their houses:

"I was fined for late tax payment, I don't know how to calculate the tax correctly."

"The tax authorities asked me to explain the rental revenue, I don't know what documents to prepare."

"My tenants require invoices and documents for them to declare taxes abroad, I don't know how to do it."

You start to feel confused and worried. You wonder if you have adequately prepared the knowledge and procedures to deal with similar situations. You start searching for information online, but the more you read, the more confused you feel because there are so many different sources of information, not knowing which is accurate and reliable.

These worries are entirely justified, because declaring and paying housing rental taxes is not as simple as you think. It requires you to understand the provisions of the law, know how to calculate taxes, prepare complete records and documents, and comply with the deadline. Otherwise, you will face unpredictable risks and consequences.

Understand Taxes and Financial Obligations

To solve the above problems and worries, you need to equip yourself with complete and accurate knowledge about taxes and financial obligations when renting houses to foreigners. Here is some important information that you need to grasp:

1. Types of Taxes Payable:

When renting out a house, you will have to pay two main types of taxes:

Value Added Tax (VAT): VAT applies to housing rental activities with a tax rate of 5%.

Personal Income Tax (PIT): PIT applies to income from housing rental activities with a tax rate of 5%.

Thus, you will have to pay a total of 10% on housing rental revenue.

2. How to Calculate Tax:

The method of calculating housing rental tax is quite simple. You only need to take the housing rental revenue and multiply it by the corresponding tax rate.

Housing rental revenue: Is the total amount of money you receive from renting out the house, including monthly rent and other fees (if any).

VAT payable: Housing rental revenue x 5%.

PIT payable: Housing rental revenue x 5%.

Total tax payable: VAT + PIT.

Example: You rent out an apartment for 20,000,000 VND/month. The tax you have to pay is:

VAT: 20,000,000 x 5% = 1,000,000 VND

PIT: 20,000,000 x 5% = 1,000,000 VND

Total tax: 1,000,000 + 1,000,000 = 2,000,000 VND

3. Tax Declaration Documents:

To declare housing rental tax, you need to prepare the following documents:

1. VAT tax return (Form No. 01/GTGT).

2. PIT tax return (Form No. 01/BK-TNCN).

3. Copy of the house rental contract.

4. Other relevant documents (if any).

4. Tax Payment Deadline:

The deadline for paying housing rental tax is no later than the last day of the month following the quarter in which the tax obligation arises.

Example: If you have income from renting out your house in the first quarter (from January to March), you must pay taxes no later than April 30.

5. Tax Payment Location:

You can pay housing rental tax at one of the following locations:

Tax Sub-Department where you reside.

Banks or credit institutions authorized to collect taxes.

The electronic portal of the General Department of Taxation.

6. Other Financial Obligations:

In addition to taxes, you also have some other financial obligations when renting houses to foreigners, such as:

Business license tax: If you rent out a house for business purposes, you must pay an annual business license tax. The business license tax rate depends on your housing rental revenue.

Declare and pay tax on behalf of foreigners: In some cases, you may have to declare and pay PIT on behalf of the foreigner renting your house.

7. Important Notes:

Keep all invoices and documents related to housing rental activities carefully for tax declaration and payment purposes.

If you are unsure about any tax-related issues, contact the tax authorities or tax consultants for assistance.

Regularly update the latest tax regulations to ensure compliance with the law.

Outcome: Renting Out Your House With Peace of Mind, Increasing Income

When you have mastered the taxes and financial obligations when renting houses to foreigners, you will feel much more confident and secure. You will no longer have to worry about being fined or subject to tax arrears. Instead, you can focus on managing and developing your housing rental business, thereby increasing your income and achieving your financial goals.

Complying with the law on taxes not only helps you avoid legal risks but also contributes to building a healthy and sustainable business environment. You will become a reputable landlord and trusted by customers, thereby attracting more potential customers and maintaining good relationships with them.

In addition, understanding taxes also helps you manage your personal finances more effectively. You will know how to plan your spending and invest reasonably to optimize profits from your housing rental business.

In summary, mastering knowledge about taxes and financial obligations is extremely important for anyone involved in housing rental activities, especially to foreigners. Equip yourself with the necessary knowledge to do business effectively and sustainably.

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