Tightening real estate transfer tax is still "confusing"

The number of people waiting to do administrative procedures related to land has increased.

However, in many cases, determining the correct price declaration causes many tax records to be stuck, affecting both buyers and sellers.

There are cases where the declared price is correct, the payment is made entirely through the bank, the bank appraises the property and lends a sum of money, but the file is still stuck, even when the seller makes a commitment that if the declaration is incorrect, the file will be transferred to the police.

Revenue increased sharply thanks to tax tightening

Having just sold a 50m2 plot of land for more than 2 billion VND, but in the notarized transfer contract, Ms. HMU (Thanh Xuan, Hanoi) still recorded the selling price as 800 million VND. However, after checking, the tax authority contacted and asked Ms. U. to re-declare the price according to the actual transaction.

Therefore, the tax amount she had to pay was nearly 40 million VND (2% of the transfer price) instead of 16 million VND as initially declared. "Luckily, the tax office did not return the documents but only asked me to re-declare. For this same plot of land, 1 year ago, the amount I paid the seller was 4 times higher than the price stated in the notarized transfer contract," said Ms. U.

Acting as a broker for a client selling a 150m2 plot of land for more than 1 billion VND, Mr. An (Long An) only declared the transfer price at 150 million VND as usual, and at the same time agreed with the seller to issue the certificate to the buyer.

Of which, the personal income tax from real estate transfer activities is expected to be paid only 3 million VND. However, when the notarization deadline came, the tax authority did not agree to complete this procedure on the grounds that the declared price was low.

"To get the application approved, the selling price of such real estate must be declared to be over 500 million VND. Thus, the tax payable will be over 10 million VND. I have to work with the seller again to get them to agree on the additional costs.

There are cases where the seller bears the tax, but there are also cases where after the notary pays the full amount, the seller says that his responsibility is over and the buyer is forced to bear the tax to get the certificate," said Mr. An, adding that in many cases, the seller and buyer have not agreed on the tax cost in advance and have to pay extra.

According to the General Department of Taxation, since 2020, the tax sector has focused on combating revenue loss from real estate transfers. In the first quarter of 2022 alone, with more than 60,200 records, the increased tax revenue from real estate transfers was VND326 billion. The increased revenue is due to taxpayers re-declaring the transfer price.

Tired of pricing procedures

However, "determining the right price" also causes a lot of trouble for home buyers and sellers, as in the case of Ms. NTTT (District 8, Ho Chi Minh City).

After submitting the documents to pay taxes on the sale of the house, on April 8, she went to receive the results but was told by an officer of the District 8 Tax Department that the boss did not sign the documents because the house sale price was declared low. When she asked for a written response, the officer instructed her to register to meet with the leader to explain.

That same afternoon, when she returned to the agency, Ms. T. was only told verbally that the tax agency felt the price of the house she sold was low.

After Ms. T. protested, the tax authority agreed to record the minutes of the meeting. However, it was not until April 17 that Ms. T. received a letter from the post office sent home with a document from the District 8 Tax Department, stating that "because the purchase and sale price stated in the contract was not appropriate, the tax department is currently preparing procedures to verify the transfer price on the market".

The frustrating thing is that the document does not state a verification deadline, so Ms. T. does not know how long she will have to wait even though she submitted her application on April 1.

Also according to Ms. T., during the discussion, the tax authority gave a reason to believe that she declared a lower value than the real value, which is that District 8 does not have any house priced below 2 billion VND (?), why is it advertised online for 2.3 billion but sold for 1.9 billion and it is impossible to have that price for a 40m2 house (?)!

But according to Ms. T., although the house has an area of ​​40 square meters on the land register, the alley leading to the house is very small and winding, making it difficult for motorbikes to enter. In addition, the house has only been built but not completed and is located in a mixed residential area. The time to sell the house was close to Tet, because she needed money, so she accepted to sell for 1.9 billion VND...

"When submitting the tax declaration, I also submitted a report on the purchase and sale as described above and both the buyer and seller signed a commitment that they would be responsible before the law if there was any false tax declaration.

However, the tax authority still delayed the file and I had to complain in many ways, even to the Ho Chi Minh City Tax Department, and it was not until the end of April that it was resolved. During that time, I was still held back 900 million VND, but the bank disbursed it but froze the account, waiting for the name change to be completed before unfreezing the account," Ms. T. was upset.

The City Tax Department said it has directed tax branches to have people make commitments and conduct post-audits, and not to make it difficult for people to complete procedures to pay real estate transfer tax.

Do not "paste" the profile

According to the reporter's records, not all tax offices do the same thing in "determining the correct price". The leader of the Thu Duc City Tax Department said that in cases where the buyer and seller pay via bank, the taxpayer can prove it to the tax authority with a bank statement. Otherwise, the tax authority will require a commitment before processing the application.

However, the tax authority will then randomly select suspicious files for verification. If it discovers false declarations to evade taxes, the tax authority will transfer the files to the police. "I also urge everyone to agree on this principle to avoid making things difficult for taxpayers," he said.

Meanwhile, according to Mr. Thai Minh Giao, Deputy Director of the Ho Chi Minh City Tax Department, since mid-April 2022, the department has issued a document to tax branches, stating that "it is strictly forbidden to arbitrarily cause difficulties and troubles for taxpayers such as returning documents, inviting taxpayers to explain without stating the reason".

"In cases where the tax authority requests the taxpayer to explain, there must be an invitation letter. When working, a record of the incident must be made and accompanied by supporting documents as a legal basis for tax determination and post-control (bank reconciliation, coordination with notary offices, land registration office branches), to avoid delaying the file," said Mr. Giao.

Speaking to reporters, Mr. Nguyen Tien Truong, Deputy Director of the Hanoi Tax Department, said that in Hanoi, there is still a situation where taxpayers declare transfer prices on transfer contracts or on tax declaration forms that are inconsistent with the actual transaction in order to evade taxes.

Therefore, this agency has required people and businesses to accurately, honestly and fully declare the actual transfer price on the transfer contract as well as on tax and fee declarations... when transfer transactions occur.

In case of incorrect declaration of the actual transaction price, the buyer and seller must re-establish a new notarized record with the correct transaction value. If the price cannot be adjusted, the taxpayer must contact the tax authority in the area where the transferred real estate is located to declare and adjust the relevant tax and fee obligations. In cases with signs of crime, the tax authority will coordinate with the investigation agencies to handle the case criminally.

"In addition, to avoid tax losses, the Hanoi Tax Department is coordinating with relevant agencies to advise and report to the City People's Committee to develop a land price list close to the common land price on the market. Some Hanoi tax departments also requested that the database of transfer transaction prices needs to be continuously updated to ensure that it closely follows the market price, because real estate prices fluctuate continuously," Mr. Truong added.

According to Tuoi Tre