Tax authorities will strengthen coordination with relevant agencies in tax administration for business activities and real estate transfer. Photo: Internet.

Strictly managing declaration of real estate transfer

The tax administration for real estate transfer by Hanoi Tax Department has achieved positive results, contributing to completing the revenue estimate of the city. The rate of applications that have declared prices for real estate transfer is higher than the price prescribed by the Hanoi People's Committee. This rate in 2021 was higher than in 2020. The declared tax amount in 2021 increased compared to 2020 in both absolute numbers and percentage.

This shows that the awareness of taxpayers in compliance with the tax law when implementing real estate transfer has changed in a positive manner.

However, there is still the situation that the taxpayer has declared the real estate transfer prices on sales contracts, transfer contracts or on tax declarations that are not consistent with the law, causing revenue loss.

According to the regulations of the Law on Tax Administration, the undervalue declaration of the real estate transfer price compared with the actual transaction price for reducing the payable tax amount is an act of tax evasion.

In order to ensure fairness for taxpayers and prevent revenue loss, the tax authority has actively researched and advised competent agencies to amend and supplement legal tax documents related to the calculation for personal income tax, registration fee and corporate income tax.

In addition, the Hanoi Tax Department continues to strengthen notification of legal policies, especially regulations on tax evasion and handling of violations, and tax policies related to real estate transfer for taxpayers to understand via forms such as providing an "Open Letter" at the Land Registration Office and the One-stop-shop; updating articles on the website of the tax authority or via mass media and social media platforms (Facebook, Zalo), radio and portals of districts and towns.

The Tax authority cooperates with the Department of Justice to direct notarization organizations in the area to instruct taxpayers to declare the actual price in real estate transfer transactions.

On the other hand, the tax authority will strengthen coordination with relevant agencies in tax administration for real estate transfer and business activities, and report to the city People's Committee to develop a land price list close to the price on the market.

Strictly handling fraud

Annually, the tax sector plans inspections and examinations to detect acts of tax evasion and tax fraud related to real estate business activities, implements tax assessment, tax arrears and penalties for tax violations.

The tax authority imposes administrative sanctions on tax violations that do not show serious signs for criminal prosecution as prescribed in the Law on Tax Administration.

For cases showing criminal signs, the tax authority will coordinate with competent agencies in investigating as per the regulations of Joint Circular 01/2017/TTLT-BCA-BQP-BTC-BNN&PTNT-VKSNDTC dated December 29, 2017 to strictly handle tax evasion.

Therefore, the city’s Tax Department recommends that the taxpayers must declare accurately and fully the actual price of real estate transfer on the transfer contract as well as on the fees and tax declaration form to protect their own interests.

When transferring real estate, if the taxpayer falsely declares the price on the transfer contract and has not yet implemented procedures for registration and granting of a new use right certificate, it must ask the notary agency to cancel the former notarized profile and make a new one.

If the taxpayer has declared the real estate transfer price lower than the actual price and cannot adjust the price stated on the notarized transfer contract, the Department requests the taxpayer to actively contact the tax office where the real estate is transferred to declare and adjust tax and fee obligations.

This is the most effective method to protect the interests of the taxpayer and prevent legal problems arising in using real estate such as complaints, lawsuits, denunciations, compensation, and other problems. If there have problems related to tax policies, enterprises and taxpayers should contact the tax office for guidance.