The Ministry of Finance proposes to pay for property transfers through banks

DNHN - The Ministry of Finance will continue to advise the Government in the future period to implement a variety of measures to minimize the misuse of policies and solutions in compliance with the legislation aimed at reducing tax loss, which causes problems for taxpayers.

According to the Ministry of Finance, the tax base from real estate transfer is established as follows: if the real estate transfer contract does not mention the price, the land price list specified by the provincial People's Committee serves as the foundation for tax computation.

The transfer price is less than the land value established by the province People's Committee at the time of transfer. The province People's Committee possesses the jurisdiction to publish the land price list and land price adjustment coefficient. 

If the tax declaration dossiers received by the tax authority directly from the taxpayer or through the receiving agency under the one-stop-shop mechanism are illegal or insufficient, the tax authority may request taxpayers or the receiving agency under the one-stop-shop mechanism to adjust and supplement the information or coordinate with competent state agencies to verify information as a basis for tax collection.

To counter tax fraud and evasion, the Ministry of Finance has issued formal dispatches coordinating the implementation of measures to prevent revenue loss in real estate transfer operations with agencies and sectors.

In reality, personal income tax revenue from real estate transfer increased by about VND 3 billion in the first three months of 2022, reaching VND 8,209 billion (up 63 per cent compared to the first 3 months of 2021). In many situations, individuals re-declared to enhance the transfer value, which has grown by two to five times compared to the original, and there are even instances where the transfer value grew by twenty or forty times.

The Ministry of Finance has sent a document to the People's Committees of provinces and centrally-run cities to propose the promulgation of a land price list and land price adjustment coefficient as the basis for tax calculation and payment, to prevent the loss of tax collection upon transfer, and to reduce administrative procedures for individuals and businesses. This is to limit the abuse of policies and solutions enacted by the law on preventing tax loss, which causes difficulties for taxpayers.

Nonetheless, tax officials must not create obstacles for taxpayers. In addition to the aforementioned solutions, the Ministry of Finance will continue to advise the government shortly to implement several other solutions, such as organizing a review of legal documents about business activities and real estate transfer, to ensure consistency and synchronization.

PV