Real estate transfer tax re-declaration increased by 2-5 times, people are confused, how to “understand and be reasonable”?

More than 60,000 tax documents have to be re-registered

According to the ministry, there have recently been some complaints in some places where tax officials are causing difficulties and nuisances for people and businesses. Therefore, the finance minister continues to direct the general tax department to urgently recommend solutions to accurately determine the real estate market price to avoid tax losses.

In addition, the minister called on the general tax department to step up inspection and strictly deal with violations of officials. Quarterly report on the assessment of the results of combating tax losses in business activity and real estate transfer; Results of viewing additional taxpayer declarations, but no change in transfer price.

According to Director-General of Taxation Cao Anh Tuan, during the period from January 1, 2021 to January 15, 2022, the tax authorities have fought against revenue loss with 233,983 organizations and individuals with remittance records. The real estate transfer has increased revenue by more than VND 500 billion, and in the period from January 1, 2022 to March 31, 2022 alone, tax authorities at all levels have struggled with 60,289 records, revenue has increased by more than Dong 326 billion.

More precisely in the city. Hanoi increased by VND 550 billion in 2021 compared to 2020, the rate increased by 24% while the number of applications increased by 11.7%. In Ho Chi Minh City in 2021 a 20% increase from 2020, a 57.11% increase in the first 3 months of 2022 from the same period. In particular, through struggles in some places, organizations and individuals have declared that the price of real estate transfer has increased 2-5 times compared to the originally declared price.

Real estate transfer tax re-declaration increased by 2-5 times, people are confused how to do it

In fact, the tightening of 2 prices in the declaration of real estate transfer leads to an accumulation of documents on the transfer of real estate, while determining the market price for tax calculation is quite ambiguous.

The fact that the tax authorities in Ho Chi Minh City have tightened the situation of buying and selling real estate at “two prices” is necessary to avoid the loss of state tax revenue and has brought good results when the additional tax is very high. However, the re-declaration of taxable prices when transferring real estate has raised many problems.

Recently, the tax industry in Long An has returned hundreds of property transfer tax payment records, believing that the quoted price is lower than the market price. It is worth noting that the advertised prices are higher than the land prices announced by the People’s Committee of that province. Not only in Long An, but also in many places including Ho Chi Minh City, the calculation of real estate transfer tax is confusing and causes many inconveniences and frustrations for people.

Representatives of the Ho Chi Minh City Association of Tax Advisors and Agents once said that local authorities now often return documents because they believe that when a house is sold the price will be lower than the actual price or officials think so that the price is lower than the actual price. Low tax return should be re-declared. In making this decision, the tax office relies on data from similar or neighboring transactions as a reference and on the land price lists issued by the municipalities, so that the purchase price is not lower than this price list. But the land price list is often much lower than the market price.

However, which price is the market price, the tax authority cannot explain, but in general, the market price is the reference price of transactions in the vicinity. Another solution currently used to determine the market price is based on the valuation tables of independent valuation companies. But no matter how applied, it still doesn’t reflect the current market price.

How “reasonable, rational”?

Lawyer Nguyen Bich Tram from the Ho Chi Minh City Bar Association told the press that the real estate transfer price is the basis for the tax calculation. If the transfer contract does not specify the price or the price on the transfer contract is lower than the land price set by the Voivodeship People’s Committee at the time of the transfer, the transfer price will be determined according to the land price list prescribed by the Provincial People’s Committee. .

However, the current problem is that there is no document that stipulates that the transfer contract cannot be written below the actual transaction price, even if the contract does not have to include the transfer price. Therefore, in order for people to correctly record the actual transaction price on the notarization contract, Ms. Tram says they must first change the law in a clear, specific and understandable way. The requirement of correctly recording the high actual price, which assumes the market price, should also consider reducing the real estate transfer tax. This is because the current method of taxation is a flat rate calculation, not the true nature of income tax.

Attorney Tran Duc Phuong of the Ho Chi Minh City Bar Association also agrees that municipalities must immediately produce a taxable real estate price list to be open and transparent, but cannot forever rely on the honesty of the leave applicant. Steuer, can no longer have the file returned by the tax office because the neighboring property is being sold at a higher price.

According to LS Phuong, it is not possible to re-examine all tax records to determine whether people have reported the correct market price. This is very poor, not even enough people for it, so the tax authorities are piling up files.

Many industry experts support the tax authority’s fight against revenue loss in this area, but it is necessary to review the current method, which is not effective, sometimes “overdoes it” and violates the law and harms people.

Real estate transfer tax re-declaration increased by 2-5 times, people are confused how to do it

Some experts offer solutions, so the best solution is to have a roadmap to force individuals or organizations to go through the bank when transferring real estate without using cash to have a basis to prove the purchase price. The next step is to have a roadmap to create a land price list according to market prices. From here, when calculating tax, there is a margin for people to declare taxes higher or lower than that margin to be considered valid.

And LS Tran Minh Cuong, CEO of the law firm Solution & Partners, also said that the tax industry should issue a specific land price list for each year to collect taxes, since the tax bureau currently collects taxes at the market price. The market will not be exact because the market always moves in a sine wave, also the bid price and the bid price are different, the buyer and the seller will never have an exact number even in the transaction through the bank. Currently, the application of the property tax has slowed down the name transfer process, but the tax authorities have not yet processed the files according to the schedule. The basic solution is still to provide a post-market taxable price list for people to refer to.

Some people think that determining the real estate price according to the market price before calculating the tax is a “blind spot” that has caused frustration between citizens and tax officials in recent years. This is also the point where tax records are stretched, easily causing trouble for tax officials and harassing people. In fact, when transacting, people often have the mentality of declaring half the market price to reduce the amount of tax they have to pay. The application of measures to avoid loss of tax revenue in real estate transactions as in the past is necessary, but should be holistic and have no consequences.

For example, requesting a transaction through a bank account with no penalties will also result in a partial cash payment, encouraging the use of cash payments.

In order to increase household income related to real estate, only the law can be changed. The Income Tax Act of 2007, the Tax Administration Act of 2019 and the Decrees and Circulars on Personal Income Tax do not contain an intelligible provision that the Transfer Agreement cannot be written below the Transaction Price. actual translation. The price determination in the notarial contract has been tacitly recognized for decades, just in the vicinity of the apartment price range.

Therefore, in order for people to correctly record the actual transaction price on the notarization contract, the state must first change the law in a clear, specific, easy to understand, benevolent and reasonable direction. At the same time, the state must also do many other things to ensure synchronization, consistency and feasibility in implementation.

Accordingly, in the next revision of the land law, it is necessary to bring the land price closer to the market price within the framework and the land price list determined by the state and municipality through a mechanism for establishing an independent land appraisal council. in towns. If the price of land prescribed by the state, which is used for tax calculation, also corresponds to the market price, there is no need to monitor, investigate and monitor, but only to buy and sell land through a notarial contract, the name automatically assigned transferred and the right to pay VAT , sufficient. Tinh-thuan-ly-20220429201900898.chn

According to Bao Anh

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