Real estate transfers are among the most complex corporate income tax (CIT) activities: revenue recognition, timing, provisional payment mechanics and loss-offset rules all carry new points under Vietnam’s CIT Law 67/2025/QH15 and Decree 320/2025/ND-CP. Most notably: the provisional payment rate for projects collecting advance payments on a progress basis has changed from 2% (old rule) to 1% — applying the old rate means filing wrong from the start.
1. The CIT formula for real estate transfers
CIT payable = (Transfer revenue − Costs − Deductible items) × 20% tax rate (Article 16.4 of Decree 320/2025). Key elements:
- Taxable income = taxable revenue − carried-forward real-estate losses (if any);
- Transfer revenue follows the actual contract price, including surcharges and additional fees collected by the seller (Article 17.1.a of Decree 320/2025);
- Where the land-use-right transfer price is below the provincial land price table at contract signing, revenue is computed using the land price table;
- Revenue timing: when the seller hands over the property to the buyer — regardless of ownership registration status (Article 17.1.b).
2. Key new point: the 1% provisional mechanism (replacing the old 2%)
For infrastructure or housing projects developed for transfer or lease that collect advance payments on a progress basis (Article 17.1.c of Decree 320/2025):
- Where matching costs are determinable → declare based on revenue minus costs;
- Where costs are not yet determinable → declare a provisional 1% on cash collected (excluding VAT). This revenue is not yet counted in the year’s taxable revenue;
- Upon handover of the property, a final settlement is required: shortfalls are paid additionally, surpluses offset the next period or are refunded;
- Advertising, marketing, promotion and brokerage costs incurred during marketing under the 1% provisional regime are not counted in the year incurred; they become deductible in the first year of property handover (point c4).
Must remember: the 2% rate belonged to the old Circular 78/2014 — the new framework sets 1%. Filing at the old rate is a wrong filing.
3. Offsetting real-estate losses — new under Article 7.3 of Law 67/2025
- Losses from real estate transfers may be offset against taxable income of other business activities at the company’s choice;
- BUT they may NOT be offset against income of business activities currently enjoying tax incentives;
- Remaining income after offset is taxed at the rate of the activity generating the remaining income;
- Loss carry-forward runs for no more than 5 consecutive years (Article 16 of Law 67/2025).
Transfers of mineral exploration, mining and processing projects must be determined separately for declaration and may not cross-offset losses/profits with business activities in the period (Article 7.4).
4. Real-estate income is excluded from preferential rates
Under Article 18.3 of Law 67/2025, income from real estate transfers is not eligible for the 15%/17% preferential rates or the incentives in Articles 4, 13, 14, 15 — except for social-housing construction investment. Companies with both incentivized projects and real-estate transfers must keep the two income streams separate.
5. Filing: two company groups, two approaches
- Companies without regular real-estate transfer activity: provisional declaration per transaction (form 02/TNDN);
- Real estate businesses: provisional quarterly CIT payments; year-end separate settlement in the head-office return (form 03/TNDN);
- A note on procedural guidance: some official letters (e.g., Official Letter 3176/DON-QLDN1 of 2026) cite Circular 80/2021 on quarterly filing — companies should check the current validity of those provisions after Tax Administration Law 108/2025, Decree 252/2026 and Circular 89/2026, and not cite old texts blindly. The most reliable current basis is the Decree 320/2025 provisions above.
6. Common risks and recommendations
- Filing provisional payments at 2% out of habit: the correct current rate is 1% — wrong rate means a wrong return;
- Recording a transfer price below the land price table: revenue will be reassessed using the land price table;
- Wrong revenue timing: timing is handover of the property, not issuance of the land title;
- Offsetting real-estate losses against incentivized income: prohibited under Article 7.3 — keep income streams separate;
- Claiming preferential rates on real-estate income: excluded under Article 18.3 (except social housing);
- Recommendations: for progress-billing projects, track collected revenue against matching costs per installment from the start; complete the final settlement upon handover; account real-estate transfers separately from incentivized activities.
7. Frequently asked questions
What is the CIT rate on real estate transfers?
20% on taxable income (Article 16.4 of Decree 320/2025). Real-estate income is not eligible for the 15%/17% preferential rates (except social housing).
For progress-billing projects where costs are not yet determinable, what is the provisional rate?
A provisional 1% on cash collected (excluding VAT); final settlement upon handover. This is new — different from the old 2% rule.
When is real-estate transfer revenue recognized?
When the seller hands over the property to the buyer — regardless of ownership registration.
Can real-estate losses offset profits from other business?
Yes, at the company’s choice — but not against income of activities enjoying tax incentives (Article 7.3 of Law 67/2025).
If the contract price is below the land price table, which price applies?
The provincial land price table at the time of contract signing.
Sources
- CIT Law 67/2025/QH15 — effective 01/10/2025, applicable to tax year 2025: Article 3.2 (other income includes real estate transfers), Article 7.3 (real-estate loss offset), Article 7.4 (minerals determined separately), Article 16 (5-year loss carry), Article 18.3 (no preferential rates for real-estate income, except social housing);
- Decree 320/2025/ND-CP — effective 15/12/2025: Article 15 (taxable income from real estate transfers), Article 16 (tax base; 20% rate), Article 17.1 (point a: revenue and land price table; point b: handover timing; points c1–c4: 1% provisional payment and settlement upon handover).
For reference only; not legal advice. This article was drafted by AI and quality-checked by the AI Legal Council of FLAT Law Firm; it has not been reviewed or approved by a human lawyer. Regulations may change; please check the current legal texts before applying.
Does your company have real estate transfer activity that needs a tax review? Contact FLAT Law Firm for advice.
