Illustrative Photo: internet

Specifically, the National Assembly deputies raised a question that, in order to avoid loss of tax revenue, the tax agencies have returned applications and asked applicants to re-declare the real estate transfer prices; however, the re-declared prices are also not likely to be true with the actual transaction prices.

Moreover, the law has not yet provided for the return of applications, which affects the interests of the people, and even generates negative effects and harassment from the tax agencies.

Therefore, it is necessary to have a legal basis to calculate the taxable price for real estate transfer, avoiding tax revenue loss, and improve the effectiveness and efficiency of state management agencies in the field of real estate business.

Furthermore, according to the Land Law 2013, the list of land prices is developed by the Provincial People Committees and approved by the Provincial People’s Council before promulgation.

The list is developed on a five-year period basis and announced on January 1st of the period.

Actually, the real estate prices have surged in a short time. The fixed list of land prices for five years does not match the market. On the other hand, there are no regulations stipulating agencies in charge of developing real estate transaction prices, so the loss of tax revenue has occurred.

The concept “the real estate transaction price is calculated according to the market price” has shown inadequacies in management.

Responding to this issue, the MoF said that based on Decree 12/2015/ND-CP dated February 12, 2015, of the Government amending and supplementing some articles of Decree 65/2013 dated June 27, 2013; Circular 92/2015 of the MoF, tax from real estate transfer is determined as follows: the list of land prices regulated by the Provincial People Committee is the basis for tax calculation in the case where the transfer price is not stated in the contract of real estate transfer or is lower than the price stipulated by the Provincial People Committee at the transfer time.

Pursuant to the Land Law 2013 and Decree 44/2014/ND-CP dated May 15, 2014 of the Government providing for land prices, the promulgation of land price and land price adjustment is decided by the Provincial People Committee.

Based on the Law on Tax Administration 2019 and Article 13 of Decree 126/2020 of the Government dated October 19, 2020 detailing some articles of the Law on Tax Administration, tax returns received directly by a tax officer or received online via single window mechanism are illegal and insufficient, the tax agency has right to ask the taxpayer or the agency receiving the tax returns via the single window mechanism, to verify the information to serve tax calculation and notify the tax payment according to regulations.

To solve tax fraud and evasion, the MoF sent Dispatch 14257 dated December 15, 2021, Dispatch 438/BTC-VP dated December January 12, 2022 to the People's Committees of the provinces and centrally-run cities; the Ministry of Public Security; and Ministry of Justice to request coordination and solutions to prevent loss of revenue in real estate transfer activities.

In fact, in the first three months of 2022, personal income tax revenue from real estate transfer activities rose 63% or nearly VND3,200 billion year-on-year to VND8,209 billion. In many cases, people re-declared the transfer price which increased from 2 to 5 times from the original, especially in some cases, the re-declared price increased 20 times or 40 times.

In order to limit the abuse of policies and solutions on anti-tax revenue loss, some tax officials harassed and caused difficulties for taxpayers. On April 28, 2022, the MoF sent Dispatch 3849 to the People's Committees of the provinces and centrally-run cities to request for promulgation of the land price list and land price adjustment coefficient as the basis for tax calculation, tax payment in order to avoid loss of tax revenue upon real estate transfer and reduce administrative procedures for people and businesses.

The MoF also issued Dispatch 3778 dated April 27, 2022 requesting the General Department of Taxation to direct tax authorities not to cause difficulties for taxpayers. The General Department of Taxation issued Dispatch 1381/TCT-DNNCN dated April 28, 2022 directing tax authorities to strictly comply with regulations on the order and procedures for handling documents to determine financial obligations and working process with taxpayers according to the provisions of the Regulation on receiving citizens at tax offices at all levels and the process of receiving and processing tax procedures of taxpayers according to the single window mechanism and issue monitoring mechanisms, avoiding the phenomenon of harassment in information provision and guidance on the declaration of real estate transfer prices for taxpayers.

The MoF affirmed that the solutions taken by the tax authority such as strengthening information to raise legal awareness, strengthening control based on risk assessment, detecting signs of false declarations for profiteering to remind and require re-declarations in accordance with the provisions of the law, has effectively increased revenue for the state budget, avoided the consequences of penalties and sanctions when the inspector detects tax evasion for taxpayers.

The MoF has directed the General Department of Taxation, the Tax Departments of the provinces to advise the Provincial People's Committees to develop and publicize the land price lists, and adjustment coefficients, and real estate transaction price data to create favorable conditions for taxpayers.

In addition to the above solutions, the Ministry of Finance will continue to advise the Government to implement a number of solutions, such as reviewing legal documents related to business activities, and transferring real estate for revision to ensure consistency.

In addition, the Ministry of Finance has also added regulations on payment via banks for real estate transfer activities in Article 16 of the Law on Real Estate Business 66/2014/QH13 dated November 25, 2014.

All these solutions have contributed to combating the loss of tax revenue from real estate transfer activities.