Question:
In May 2019, our company leased premises from an individual to exhibit goods for business purposes. The rental price is 40,000,000 VND per month. The contract specifies a 3-month deposit, and rent payment starts from November 1, 2019, through bank transfer. The lease period is from November 1, 2019, to October 31, 2024. Rent is paid on the 5th of every month. The contract also states that all taxes related to this lease are to be paid by our company. Therefore, in 2019, the rent our company paid is less than 100,000,000 VND. Does this mean our company is not required to file and pay VAT, PIT, and business license tax for 2019? At the beginning of 2020, should our company file VAT, PIT, and business license tax for 2020?
Answer:
Based on Circular No. 92/2015/TT-BTC dated June 15, 2015, by the Ministry of Finance, guiding Value Added Tax (VAT) and Personal Income Tax (PIT) for individuals conducting business activities; guiding some amendments and supplements to PIT regulations in Law No. 71/2014/QH13 and Decree No. 12/2015/NĐ-CP dated February 12, 2015, by the Government detailing the implementation of the Law amending, supplementing some articles of tax laws and amending, supplementing some articles of decrees on taxes;
Based on Circular No. 96/2015/TT-BTC dated June 22, 2015, by the Ministry of Finance, providing guidance on Corporate Income Tax (CIT) in Decree No. 12/2015/NĐ-CP dated February 12, 2015, by the Government detailing the implementation of the Law amending, supplementing some articles of tax laws and amending, supplementing some articles of decrees on taxes and amending, supplementing some articles of Circular No. 78/2014/TT-BTC dated June 18, 2014, Circular No. 119/2014/TT-BTC dated August 25, 2014, and Circular No. 151/2014/TT-BTC dated October 10, 2014, by the Ministry of Finance;
Based on Circular No. 302/2016/TT-BTC dated November 15, 2016, by the Ministry of Finance, providing guidance on business license tax.
In accordance with the above regulations:
In the case of the company leasing premises from an individual and making monthly payments, the company is responsible for filing and paying the relevant taxes as required. In principle, if in 2019, the individual’s rental income from the company is less than 100 million VND, the company is not required to file and pay VAT, PIT, and business license tax.
If in 2019, the individual generates rental income from multiple sources exceeding 100 million VND in total, the company must file and pay VAT, PIT, and business license tax on behalf of the individual as required.
